Homeowners are attempting to use deed in lieu of foreclosure plans as one of the options to avoid a formal foreclosure on their mortgage, but the qualifications for the foreclosure alternative plans have disqualified some individuals from receiving this assistance. There have been homeowners who have stated that finding these forms of home loan aid when economic hardship is present have been difficult in some instances, but reports released by the Making Home Affordable Program have outlined basic requirements which must be met for homeowners to receive this form of debt relief.
Obviously, homeowners who are facing particular hardships with their mortgage payment related to unemployment, underemployment, or underwater mortgages have been seeking ways to either alleviate their current mortgage burden or simply escape an undesirable mortgage situation. There have been some homeowners who have walked away from their home loans, but this is a practice that has been not only detrimental to the personal finances of homeowners but has also disqualified many from reentering the housing market for a substantial amount time.
However, homeowners who are seeking a deed in lieu of foreclosure program must meet certain criteria if they are to use the Home Affordable Foreclosure Alternatives plan. While there are some state-specific programs which mirror the deed in lieu of foreclosure options, many of the nation’s top mortgage servicers have adhered to these qualifications within the Making Home Affordable Program.
Outlines for servicer criteria when considering a homeowner for a foreclosure alternative plan like a deed in lieu of foreclosure program require that a homeowner either not qualify for a program within the Modification Program, were unsuccessful at completing a trial modification period, become delinquent while in a modification program, and many homeowners must request a deed in lieu of foreclosure plan from their servicer.
Obviously, these qualifications for a deed in lieu of foreclosure plan are set in place so that homeowners will have the option to save their home through a more affordable monthly mortgage payment or an extension program, and obviously, these requirements are also in place to protect some banks as, again, homeowners have been simply walking away from their home out of frustration in some cases.
While, again, homeowners must be evaluated for a modification program, those who qualify for a deed in lieu of foreclosure plan will typically transfer the ownership of their mortgage to their servicer and this will be seen as full satisfaction of the total mortgage debt which is due. There have been some homeowners who were required to attempt to sell their property before being approved for a deed in lieu of foreclosure plan, but this has not always been easy as homebuyers became somewhat scarce after the expiration of the first-time homebuyer tax credit.
Homeowners who presented a deed to their property which was clear of other mortgages or liens, are typically those who have been able to take advantage of these deed in lieu of foreclosure opportunities, as the foreclosure alternative options can also allow homeowners to escape a bad mortgage situation and see their credit score take less damage than had they simply walked away. Again, while not all homeowners may qualify for these foreclosure alternative plans, advisers are still suggesting that individuals who foresee trouble on their home loan begin the process of qualifying for a foreclosure prevention plan or requesting that their servicer allow them the opportunity to participate in an alternative program to foreclosure.