Many troubled homeowners have sought out foreclosure alternative plans in the form of short sales or deed in lieu of foreclosure opportunities. Some have been able to avoid the foreclosure process, which can be helpful in the future as homeowners try to rebuild their financial life, but there are indications that some homeowners may not have a guaranteed opportunity to avoid the foreclosure process through these initiatives.
Plans like the Home Affordable Foreclosure Alternative Program, which is an extension of the Making Home Affordable Program, was set in place to offer homeowners who may have an underwater mortgage or who have simply attempted to save their home through various foreclosure prevention opportunities the chance to avoid the foreclosure process during the loss of their home.
Understandably, homeowners wish to avoid foreclosure at all costs, but there have been cases where the loss of a home is inevitable, so homeowners have turned to these foreclosure alternative options instead. Yet, in areas like short sales, some servicers may only give homeowners one opportunity for a foreclosure postponement unless they can prove that a short sale is imminent.
While this program can help homeowners get back on their feet in a timely manner since they will not have the stain of foreclosure on their credit report, there are concerns from mortgage servicers that homeowners will not be able to use these programs in the timeframe allotted. Some servicers will only give homeowners a set period of time to take advantage of these plans, but if a homeowner fails to do so, foreclosure proceedings may begin. However, homeowners who are facing foreclosure have been advised to work with their lender so that they can use these foreclosure alternative plans and avoid the foreclosure process when they have no options left to save their home.