Homeowners who are struggling to make their mortgage payment may benefit from the Foreclosure Alternatives Program from the Making Home Affordable initiative, and particularly for some homeowners, a deed in lieu of foreclosure option has been greatly beneficial for avoiding the foreclosure process when a homeowner can no longer afford their home loan. Understandably, homeowners would much rather avoid the loss of their home in the majority of cases and find affordability in their monthly mortgage payment, but some situations have become so troubling that homeowners have few options and fear that foreclosure may be inevitable.
Yet, the Making Home Affordable deed in lieu of foreclosure plan offers homeowners the chance to escape a formal foreclosure, which could be detrimental to their credit score and this is obviously a painstaking process which no homeowner wants to experience. Luckily, mortgage servicers have allowed homeowners the option of surrendering the deed to their home when certain conditions are met and, in exchange for doing this, homeowners are able to escape obligations associated with their home and foreclosure.
Some homeowners have simply come upon a financial hardship in their life which has put them in a position where they are simply unable to continue affording their home. Obviously, factors like unemployment are one of the main reasons homeowners seek out these deed in lieu of foreclosure plans, but there are other factors like underwater mortgages for example, that could also prompt homeowners to seek out this type of foreclosure alternative initiative.
Essentially, a deed in lieu of foreclosure plan from the Making Home Affordable Program allows a homeowner to voluntarily transfer the ownership of their home to their servicer and this is considered to be a full satisfaction of the total amount which is due on their property. While a servicer might ask that a homeowner list and attempt to sell their home, through either a traditional sale or short sale, or may have a homeowner attempt to qualify for a home loan modification if affordability is their issue, homeowners who offer a home which is free of other mortgages or liens may qualify for this foreclosure alternative option.
While a deed in lieu of foreclosure plan may not be an option for every homeowner, servicers and financial advisers often prompt homeowners who are facing financial difficulty to either contact an approved housing counselor or speak directly with their mortgage servicer about options which could be helpful for their situation. Again, opportunities to gain a more affordable monthly mortgage payments are available, but homeowners who risk missing payments on their mortgage need to address this issue early so that an option like a deed in lieu of foreclosure plan may be offered before a homeowner’s situation becomes too dire.