Alternatives to foreclosure, like short sales and deed in lieu of foreclosure programs, have been greatly helpful to numerous homeowners who have suddenly come upon a difficult time in their life that has no longer given them the financial stability to meet their mortgage payment. Usually, short sales and deed in lieu of foreclosure plans have been available to homeowners who had an excellent payment history on their mortgage, but due to unemployment or cutbacks in their job, are simply in over their heads at the present time.
While job loss has been a big factor for some, short sales have been sought out by homeowners who have found that their mortgage payments have become more difficult due to the loss of value in their property. Yet, some homeowners who are having a troublesome time working with servicers to either short sell their home or participate in a deed in lieu of foreclosure program have been questioning whether banks are using these alternative plans in the majority of cases that warrant this type of assistance.
It’s understandable, though, that certain homeowners may be able to make their monthly payments, but due to factors like underwater mortgages, may be attempting to escape their mortgage obligations. There are cases where homeowners may present a fraudulent situation to a bank, which may seem like a short sale or deed in lieu of foreclosure program is warranted, so it’s plain to see why some financial institutions have been slow to offer these types of alternative plans.
Yet, there are some stories and reports which would seemingly point to the fact that some financial institutions will not allow homeowners to, for instance, short sale their home even when an offer has been made, but rather allow the home to sit empty for months before they can resell the property.
There are some cash incentives which are given to financial institutions, by organizations like Fannie Mae, but there are still complaints from homeowners that short sales and other foreclosure alternative plans are, in some cases, too difficult to obtain. However, the foreclosure alternative plans, available through programs like the Home Affordable Foreclosure Alternatives Program, from the Obama administration, are still available and can be used by homeowners.
While some financial institutions may require that homeowners try a modification plan before a foreclosure alternative program is offered, short sales and deed in lieu of foreclosure opportunities can still be helpful to homeowners, despite troubling stories. Foreclosure alternative plans are not a guarantee and mortgage servicers have been imperfect in their implementation of some of these programs, but advisers still suggest that homeowners who may qualify for these plans contact their financial institution and inquire about what is needed so that they can take advantage of these options to avoid the foreclosure process.