Stopping Foreclosures on Utah Real Estate
One of the first steps you should take in resolving your mortgage default is educating yourself about the Utah foreclosure process and the different foreclosure prevention options that may be available to you. Here I will briefly summarize the most common foreclosure prevention options. Every situation is different, and some of these options may or may not be available to you. To learn about your options for preventing the foreclosure of your Utah home, please give me a call or fill out my Fast Response Form.
Foreclosure prevention includes retention and disposition options. If you desire to retain the property, you must be able to prove to the lender with financial documentation that you have overcome the hardship that caused you to default, and that you are financially able to make the mortgage payment. All lenders are different, but here are the most common options offered by lenders to avoid foreclosure on Utah real estate.
Reinstatement
Bringing the loan current by paying all past due installments, current installments, interest, late fees, attorneys´ fees, etc.
Re-Finance
This option is usually only possible if the mortgage default problems are caught early and there is enough equity in the home to pay off the current loan and processing fees, while still keeping the new lender in a good equity position. If you have equity in your Utah home, there are lenders out there that will look past credit damage (but you can expect a very high interest rate). Your payments will most likely increase rather that decrease with a refinance.
Repayment Plan
Your lender does not want foreclosure. If you have the ability to make the scheduled monthly payment on your home, but you cannot catch up the back payments, we may be able to negotiate a repayment plan that would allow you to pay the back payments in smaller increments. This is another of the many ways to avoid a foreclosure of your Utah home.
Special Forbearance
This is a formal or informal repayment plan to reinstate a loan that has been delinquent. This could include suspension or reduction of payments for one or more months to allow you to recover from the cause of default; and/or an agreement to allow you to resume making full monthly payments while delaying repayment of the arrear-age.
Loan Modification
This is a permanent change in one or more terms of your current loan agreement. This could include a change in the interest rate, extension of the time available to repay the loan or re-amortization of the balance due.
Partial Claim (FHA only)
Under this option your lender may advance funds on your behalf to reinstate the delinquent loan. In return, you will have to sign a promissory note for the amount of the loan. Usually these notes accrue no interest and are not required to be paid back until the Utah real estate property is sold or refinanced.
Sale/Leaseback
This option utilizes a buyer who is willing to lease the property back to you for a certain length of time, giving you the option to repurchase the home after you have rebuilt your credit. This foreclosure prevention option is enticing to some Utah homeowners because they avoid having to relocate and will often lower their monthly payment.
Pre-Foreclosure Sale
If you cannot qualify for a retention option or do not want to keep the home, your lender may allow you the time to market your property and sell even if the market value is less than the amount owed on the mortgage. In many cases the lender will require the property to be listed with a Utah real estate agent to complete the sale.
Utah Short Sale
If you do not have the equity in your home to payoff your current lender along with any costs associated with the sale of your Utah home (agent commissions, closing costs, advertising costs etc.) your lender may accept a "short sale" [full definition]. This means that your lender will accept less than the amount owed on your mortgage to release their lien against the home.
Deed-in-lieu of Foreclosure
If you cannot or do not want to keep the home and are unable to sell the property through a pre-foreclosure sale you lender may allow you to deed the property to them in exchange for a release from all obligations under the mortgage.
Bankruptcy
If all other options fail, Utah bankruptcy may be used as a last resort. Be aware that bankruptcy does not stop Utah foreclosure. It only stalls foreclosure. Even if you file bankruptcy and include your home, your lender will eventually foreclose and you will end up with a foreclosure and bankruptcy on your credit.
Once again, every situation is different and requires individual attention. For more information about foreclosure prevention options in the state of Utah, please fill out my Fast Response Form.
