How to Keep Foreclosure Off Your Credit Report.
With the large number of foreclosures that are taking place through out the country. I am writing this article to share valuable information for distressed and struggling home owners. If you live in the Metro Atlanta Georgia area or any where in the country please read this article. Whether you are struggling to make your mortgage payment because you are sick, disabled, lost a spouse, going through a divorce or you lost your job, please know you are not alone.
If you remember the housing crisis meltdown, Georgia was one of the hardest hit states for the record number of foreclosures. REALTYTRAC reported that in the state of Georgia from May 2008 - June 2009 7,473 homes were foreclosed. From May 2009 to June 2009, 338,411 NEW FORECLOSURES were added to the Georgia roster. During the the housing crisis a total of 1,917,514 foreclosures occurred nationwide. These numbers are frightening when you think about the number of families that have been displaced because of losing their homes.
Since the onset of Covid 19 and the Pandemic some economist predict there maybe another waive of foreclosures heading our way. According to DS News" The million-dollar questions that everyone in the industry is asking right now are: “What are foreclosures going to look like once the foreclosure moratoria and forbearance programs come to end? And will we see all those borrowers in forbearance end up in default?”
The short answer is “there probably won’t be a foreclosure tsunami.” But mortgage servicers and other default servicing professionals should prepare themselves nonetheless. Some industry analysts have predicted a huge wave of foreclosures once the forbearance program comes to an end. Popular opinion at the start of the pandemic was if there were 4 million people in forbearance, we’d ultimately have 4 million people in foreclosure. But the way the program has worked so far suggests that’s simply not the case. The Federal Reserve Bank of St. Louis estimated that 500,000 borrowers avoided foreclosure during the fourth quarter of 2020 due to coordinated relief efforts, which makes the CARES Act forbearance program is one of the best examples we’ve ever seen of the government and the industry working hand-in-hand to accomplish such a positive outcome.
The program has done exactly what it was supposed to do: allowed millions of people to get through the pandemic and recession without losing their homes while giving them time to get back on their feet financially once COVID-19 is under control. But there are still millions of borrowers in the forbearance program. What will happen to them as they exit, and how will the industry handle the high volume of borrower requests for repayment plans?
As a real estate broker over the years, I have counseled many people during their time of financial strain. In many cases families are hopeless and scared and often times lack a clear understanding of what they must do in order to "Keep Foreclosure off their credit report" in addition to saving their homes.
People from all social back grounds are dealing with the issue of foreclosure mainly because of situations that are out of their control. So you ask the question, "How can I keep foreclosure off my credit report" and maintain my credit score if I am disabled, have recently lost my job and/or my spouse because of Covid 19 or because of some other hardship that was beyond my control?
Below are a few things you may want to consider in order to Keep Foreclosure Off your credit report!
1. Short Sale - A sale of real estate in which the sale proceeds fall short of the balance owed on the property's loan. It often occurs when a borrower cannot pay the mortgage payment on their property, but the lender decides that selling the property at a moderate loss is better than pressing the current debtor. Both parties consent to the short sale process, because it allows them to avoid foreclosure, which involves hefty fees for the bank and even poorer credit outcomes for the borrower.
2. Loan Modification - An agreement between the lender and a delinquent borrower that changes the terms of the loan without refinancing the loan. This could mean that your mortgage payments are lowered. And the amount that you currently owe can be added to the back of the loan.
3. Deed in Lieu of Foreclosure - An agreement where a delinquent borrower gives the lender the deed and the keys and moves out of the property in exchange for forgiveness of the loan.
4. Special Forbearance - A written agreement between the lender and the borrower which contains a plan to reinstate the loan that has been delinquent for more than 90 days. In this case, lenders will sometimes suspend mortgage payments to allow the borrower to recover from the cause of the default.
5. Partial Claim - An agreement where the lender will advance funds on behalf of the borrower in the amount necessary to reinstate a delinquent loan. The mortgage cannot be more than 12 months delinquent.
6. Chapter 13 Bankruptcy repayment plan - A form of bankruptcy that involves a wage earners repayment plan. In some cases the bankruptcy court may allow you to make payments based on your current income. This could be an option for someone who was forced to take a huge pay cut.
There are several options available for all homeowners. You can Keep Foreclosure off your credit report. Lenders are willing to work with most home owners because it is very expensive to foreclose.
Real Estate Consultant, Lisa W. Jefferson is a Georgia Real Estate Broker/Owner with 23 years of experience under her belt. She is "blessed to be a blessing" and dedicated to helping her community and her clients stay educated about home buying, home selling, and investing. For more about Atlanta Homebuyers Realty Group, visit our office located at 4319 Covington Highway, Ste 307 Decatur, Georgia 30035 or call for a free consultation today. Office: 678-824-4817 or Direct: 678-480-5054 email: www.listwithlisanow@yahoo.com