Many homeowners who have faced foreclosure over the past months have come to a point where there are few or no options left to save their home. Sadly, many homeowners have fought difficult battles in order to keep their home but have come up short and because of this there are foreclosure alternatives that homeowners can use so that, if losing their home is inevitable, they will be able to avoid the foreclosure process.
Certain programs like the deed in lieu of foreclosure plan has allowed homeowners to forgo foreclosure by surrendering the deed to their home. Oftentimes, lenders will allow homeowners to remain in their house for a set period of time after surrendering their deed so as alternative living arrangements can be made. Again, financial and economic troubles have come upon many homeowners over the past months and, as a result, those who were formerly able to pay their home loan without trouble now simply cannot meet their monthly mortgage requirement.
Deed in lieu of foreclosure plans have allowed many to avoid foreclosure, which can be helpful later in life when a homeowner’s financial situation improves and they may, again, seek to purchase a home. Typically, lenders who see a foreclosure alternative plan on a homeowner’s credit history may be more lenient than if the homeowner had simply walked away from their home loan and intentionally defaulted.
Underwater mortgages have also been a problem for many homeowners and, as a result, there have been those who have walked away from their home in what is termed a “strategic default.” Homeowners who walk away from their mortgage obligation have not only caused trouble for mortgage lenders but they have done a great deal of damage to their credit score, which can be problematic in the future. However, short sale plans have been offered to help homeowners who may face losing their home or are in underwater mortgage situation where it is unlikely that the value of their home will return any time soon.
While mortgage difficulties have come in a variety of shapes and sizes and troubled many homeowners, these foreclosure alternative plans are set in place to benefit homeowners who may have explored all of their options when it comes to saving their home. Homeowners are often advised to talk with their mortgage lender in order to explore these foreclosure alternative options so that they may be able to minimize the damage their credit score will take if they lose their home.