Deed in lieu of foreclosure and short sell plans for homeowners who are in need of an alternative to foreclosure may be available through various programs, like those offered from Fannie Mae and Freddie Mac, as there are reports which indicate more servicers may be leaning towards these foreclosure alternative efforts in the hopes of lowering costs they will incur when foreclosing on a home. Understandably, homeowners have fought diligently to avoid the loss of their homes through foreclosure, but there are some cases where an underwater mortgage or extreme financial hardship have simply made that too difficult and, as a result, homeowners have turned to these foreclosure alternative programs.
The Home Affordable Foreclosure Alternatives plan from HAMP has offered homeowners in some situations the option to sell their home at a loss in exchange for their servicer taking the sale as full payment of their mortgage debt, while others have been able to simply surrender the deed to their home and, again, have their servicer consider that payment in full. Obviously, homeowners who are in an underwater mortgage situation have failed to find an affordable mortgage payment solution in some cases, as have others who are simply facing hardships related to factors like unemployment.
However, a recent report from the Federal Housing Finance Agency states that in the third quarter of 2010 Fannie Mae and Freddie Mac had made 29,465 short sales and 1,728 deed in lieu of foreclosure agreements. Understandably, not all homeowners may qualify for these foreclosure alternative options, but those who have been able to take advantage of these plans have been able to forgo a traditional foreclosure, which has allowed some the option of entering into the housing market in a timelier manner once their financial position improves.
Yet, with these foreclosure alternative programs, servicers like Fannie Mae and Freddie Mac do often require that homeowners attempt to qualify for an alternative foreclosure prevention plan before they will be offered one of these alternatives, but this could be another option which homeowners use to save their home. In cases where home loan modifications have not been available or other foreclosure prevention efforts have failed, some homeowners can ask for a foreclosure alternative plan, and depending on the situation, could be offered the option to short sale their home or participate in a deed in lieu of foreclosure plan.
However, advisers have often suggested that homeowners who are seeing financial difficulties in their life or foresee trouble on the horizon make sure they take preventative measures so that they can increase the likelihood of finding an affordable option for their mortgage predicament or qualifying for one of these programs. While modifications and even foreclosure alternative plans have not always been available to all homeowners, they are options which are still available and can be helpful to those who are in a troubling financial position and are either looking for affordability in their home or simply for a way to avoid the foreclosure process.