5 Common Alternatives to Foreclosure

5 Common Alternatives to Foreclosure

Florida is a judicial foreclosure state, which means that lenders must file suit in court in order to foreclose on a property. Even if you are in default on your mortgage, you may be able to find  alternatives to foreclosure that will allow you to keep your home, including:

Reinstatement – when a debtor is able to bring their mortgage to current status, this is a win-win for both the lender and the mortgage holder.

Forbearance – if a borrower has had a temporary loss of income that has been or will be remedied in the near-term, a lender may consider a forbearance plan in lieu of foreclosure.

Modification – if both a lender and a borrower can agree to a change in terms to the original note, then a loan modification can be a useful tool in preventing foreclosure. The lender must weigh the financial benefits of a loan modification vs. the losses that will be incurred in the foreclosure process.

Short sale – this alternative has been employed more over the last few years as property values dropped and borrowers found themselves underwater on their mortgages. In a short sale, the lender agrees to accept less than what is due and the borrower walks away without a foreclosure on his or her credit history.

Deed-in-lieu of foreclosure – this process entails the borrower turning the deed for the property over to the lender to avoid having a foreclosure on their credit history. The benefit for a lender is the avoidance of a potentially costly and lengthy foreclosure process. However, lenders typically shy away from this tactic if junior liens are attached, since it would force them to negotiate the liens with the holders.

Whatever alternatives to foreclosure best fit your circumstances, the assistance of an experienced real estate attorney is essential to understanding the process.

Jurado & Farshchian, P.L. assists homeowners who are dealing with distressed loans, refinance transactions. and foreclosures. Contact one of the experienced Florida real estate attorneys at Jurado & Farshchian, P.L., at (305) 921-0440, or email us at info@jflawfirm.com.

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