Homeowners who are in need of some form of assistance for those who may be delinquent on their mortgage may face a difficult road when it comes to acquiring a home loan modification or receiving the assistance they need that will lower their mortgage payment obligation to an amount that is affordable. While there are modification programs available to help almost any homeowner no matter their position, those who have seen a drastic drop in their income or who are unemployed and may be unable to find a sustainable assistance plan like, for example, a forbearance option on a home loan payment for only a set period of time.
Yet, options for short sales and deed in lieu of foreclosure plans have helped many delinquent homeowners who face the loss of their home as the loss of income which makes it almost impossible for certain homeowners to benefit from even a modification plan has created situations where homeowners will inevitably face foreclosure without these alternative options. Foreclosure alternatives, like these short sale and deed in lieu of foreclosure plans, can be made available to homeowners who are in financial distress and, according to recent reports, this is the majority of homeowners who are looking for home loan assistance.
The December 2010 Making Home Affordable Report stated that the loss of income was the predominant reason that homeowners had when seeking a permanent home loan modification on their mortgage. The report indicated that 60.2% of homeowners had experienced hardship related to the loss of their income, but there are affordable options through modifications which may help homeowners receive an affordable mortgage payment and avoid the loss of their home as a result of foreclosure.
However, for certain delinquent homeowners who may be in a situation where a modification program is unavailable and an unemployment forbearance on their mortgage payment has expired but they are still not in a financial position to resume making either traditional or modified mortgage payment, these foreclosure alternatives are one of the more commonly used ways that homeowners can work with their servicers to avoid a formal foreclosure and escape a home loan situation that has grown to be too overwhelming.
While it goes without saying that short sales and deed in lieu of foreclosure plans are not always available to homeowners, those who can prove they have sustained a significant financial hardship due to financial setbacks related to unemployment or other sources that resulted in the loss of income usually have the option of either attempting to sell their home at a loss or simply surrendering the deed to their servicer without paying penalties and additional costs. Again, these options may not be available to every homeowner, but since the majority of homeowners seeking assistance reported in the Making Home Affordable Program where in some form of financial distress, these alternatives may be open to homeowners who have attempted to save their home but have fallen short due to their income limitations.