What are the steps to prevent foreclosure?

Seek help early – Avoiding the problem will not make it go away. The earlier you seek help, the more options you have.

Face the facts – Open your mail and respond to correspondence from your lender. If you are in a home that you can no longer afford, realistically assess whether you need to move on.

Muster your resources – Sell what don’t need that has value–a car, jewelry, household goods, etc. Try to find a second job, prioritize your spending, and see whether your family or friends will lend you money. This may seem obvious, but your effort will show your good faith to the lender.

Contact your lender – If you alert your lender of a problem, they might have programs to help, including “forbearance” (that gives you time to make up the payment, forgiveness of payment, a repayment plan, or loan notification).

Consider outside help – Housing counselors approved by HUD can review your situation at no cost, help you consider your options, and even negotiate with your lender. They can direct you to federal, state, or local programs. You can get started by calling the Homeowner’s HOPE™ Hotline at 888-995-HOPE and tell them “I need help selling my home and avoiding foreclosure!”

Look for programs that can help. Making Home Affordable, the main federal attempt to prevent foreclosure, may be the first program that comes to mind to help you obtain a loan modification if you meet the criteria. Since its inception in 2009, the program has expanded. It can address second mortgages, underwater situations, and more. Within D.C , the Homesavers Program can help unemployed homeowners. Maryland has its Hope Initiative, while Virginia has an Emergency Homeowners Loan Program, among other services.

Avoid scammers – Housing counseling to avoid foreclosure is free, but many private companies have sprung up claiming they can help you. Often these companies request high upfront fees, may take the title to your home, and don’t do as they promise. Always work through a certified housing counselor.

Need or want to move on? Here are your alternatives:

Selling my home – If your home is in good condition, and your Realtor® feels that it would command a good price in view of comparative sales figures in the neighborhood, you might consider trying a conventional sale. This might net you enough money to pay back any past debt to your lender or at least relieve you of a payment that is too high.

Consider a short sale – If your home is worth less than you owe, a short sale might be the way to go if your lender will negotiate. This will impact your credit, but not as much as a foreclosure. The process also offers you more control over your situation and saves your lender the much-higher costs of foreclosure.

Consider a deed in lieu – You can also deed the home back to the lender in return for cancellation of the mortgage. The lender will cancel the foreclosure and might even let you stay in the home until you find a place to move.

Sell my home to a third party – Companies that buy houses are equipped to move quickly to prevent your home from slipping into foreclosure.

With the help of your counselor, you may realize that you are too far behind on your payments, the home needs too much work, the payments are too high, or your home has lost too much value. Your housing counselor can help you make the transition, but you will have to give up your home. This may be hard, but will stop the foreclosure and you will then be able to move on to the next stage of your life.

If you have worked with a housing counselor, what was your experience?
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I want to sell my house fast. I can call EHB today at 1-888-835-4758 or tell us “I need help selling my home!” in hours from Express Homebuyers.

The former first-time home buyer credit is now simply the “home buyer credit.”  It is up to $8,000 for first-time buyers and up to $6,500 for certain repeat buyers.  In either case, the deadline is April 30, 2010 for signing a contact and June 30, 2010 to close. The extra seven months give new life to short sales.  As long as a buyer has a contract in place by April 30, even if the closing does not occur till 11:59 pm, on June 30, the short sale buyer can claim the credit.

There is no guarantee as to how long a short sale will take to close, but if your buyer starts the process, you should have no problem.  The probability of success will decrease the closer time gets to the April 30^th deadline.

As it happens, there are may soon be incentives that will make short sales faster.  First, the government is now trying to promote short sales through the Making Home Affordable program.  That news is several months old, but the Treasury has been promising to release new incentives for lenders and sellers.  That should happen soon.

Second, lenders, starting with Bank of America, are beginning to implement a revamped short sale portal designed to centralize and streamline short sale processing.  Many of the 17 lenders that use the Equator (formerly REOTrans.com) program are expected to get on board.

If banks have any sense, they will embrace short sales and try to resolve as many as possible in the wake of continuing foreclosures.  That is not a done deal, however, as lenders and servicers are overwhelmed. Trying to selling your home at short sale could still be a prolonged process that results in refusals by the bank to accept your deal.  As the weeks and months drag on, you can find yourself under mounting mortgage pressure.

The Home Owner Credit offers you a chance to get a buyer; the extended time increases the likelihood the paperwork will go through, but there is still no certainty.

Can’t Wait It Out?

Express Homebuyers offers an alternative.  We will buy your home and guarantee completion of the process within a couple weeks.  We tell you up front what we will pay; if you agree, you are on the way to a quick resolution.  We even offer you a $2,500 upfront advance you can plan your fresh start.  Call us at 1-877-804-5252 or check out our Express Homebuyers website for more details.