Foreclosure has become a possibility for many homeowners as unemployment still remains a major factor in the lives of men and women who have either lost their job or have seen drastic cutbacks and their wages. While modification plans and other assistance programs have been set in place to help homeowners avoid foreclosure, there are those who simply can no longer stop the loss of their home, and for these homeowners, foreclosure alternative programs have been offered.
While a foreclosure alternative plan is not the optimal conclusion of a homeowner’s mortgage troubles, these plans have been offered as a way to allow homeowners who face the loss of their home to more easily rebuild their financial life in the future. Short sales opportunities for homeowners who may have an underwater mortgage or deed in lieu of foreclosure programs may allow homeowners to avoid the foreclosure process and could cause homeowners to take less of a hit on their credit score.
There have been some frustrated homeowners who have used what is called a strategic default, which is essentially walking away from a mortgage obligation, but tactics such as this may put homeowners in a position where they cannot obtain another mortgage until years in the future. Homeowners who simply walk away from their home are reported to be unable to qualify for another mortgage for around 8 to 10 years since mortgage lenders see them as a risk.
Also, the foreclosure process does cause problems for many homeowners but these foreclosure alternative plans may allow homeowners the opportunity to enter the housing market in a shorter time in the future, when their finances improve. While, again, homeowners want to avoid the loss of their home at all costs, in worst case scenarios these foreclosure alternative plans may be used so that homeowners who have simply come upon a bad financial situation will not suffer in the future when they attempt to purchase a home again.