Facing Foreclosure?

For most people the thought of losing their home to foreclosure means failure and heartbreak.  With these tough economic times, there are people who have been in their homes for years, raised their families in these homes, enjoyed good times and bad times within those walls.  The thought of leaving this house they've made a home is just beyond depressing.

Unfortunately, if the homeowner is unable to keep making the payments on the house, the bank WILL take it back.  To stay in denial about this will serve no one, especially the family still living in the house. 

What steps can you take to move on from this and still keep options open to perhaps one day be able to own your own home again?

First, follow this link to read what the effects of a foreclosure will be:  http://jeffbrandsshortsalehelp.com/effects_of_foreclosure

Many people believe that filing bankruptcy will be the final answer to help them avoid foreclosure.  The sad fact about bankruptcy is that 65% of bankruptcy filers fall out of bankruptcy.  How does one "fall out of bankruptcy?"

When the bankruptcy case comes to court, the homeowner generally wants to keep the house and perhaps a car that is still financed.  The judge then rules that the payments for these items: home and car, will have to be maintained in a current status and that payments cannot be even one day late.  Second, the judge will set up a repayment plan for the filer to make up the past missed payments.  In return for this, other debts are erased.

Sadly, if a homeowner is not a position to make the payments now, they are actually worse off after the bankruptcy judge's ruling.  Now they must make each current monthly payment PLUS the additional amount for back payments.  If the homeowner's hardship is severe enough, they cannot possibly meet the demands of the bankruptcy court.  The day they miss even the first of these payments, the home will go into the foreclosure process, usually exactly where it left off.  The car will go into repossession status.

The homeowner then loses the home and the car, has a foreclosure on his credit record (sometimes permanently), has a bankruptcy on his credit record, may be facing IRS tax imposition on the amount of the forgiven loans, and may never be able to purchase a home again because of these problems.

There ARE other options.  The first thing a homeowner should do is list their home with a realtor as both for sale or for lease.  The chances of being able to keep the home are limited if there is sufficient loss of income.  Begin to make plans where you and your family can live - apartment, relatives, friends - if it comes to that.

Above all, do not just submit the keys to your lender and walk away.  There are other options.

After the home has been listed with a realtor, the realtor will have been able to advise you about the chances of selling the home within the time frame needed to avoid foreclosure.  If you qualify by meeting certain hardship requirements, i. e., loss of a job, inability to find another job, severe medical problems, death of a family member, etc., you may be eligible for a short sale.  Essentially, a short sale is the sale of your home for an amount less than what is owed on it.  The lender makes a determination of the discount value they will accept for the home and the purchaser meets the lender's requirements and buys the home.

When a short sale is finished, the homeowner will no longer have the burden of the monthly payments, will have no record of foreclosure, and usually will not face any penalties from the IRS for the "forgiven" loan amount.  There may be a brief "bump" in the homeowner's credit record but it should not keep the homeowner from being able to purchase another home at some future date.

For more information about short sales, follow this link:  http://jeffbrandsshortsalehelp.com/what_is_a_short_sale