Are you behind on your mortgage payments on your Charleston home? Catching up on a past due balance can be an overwhelming challenge, even if you are able to make your regular monthly payment. Most of us have a budgeted an amount set aside for each bill so when we get behind it feels impossible to find the extra money to get caught up.
There are a few options that can help you to avoid foreclosure in Charleston and maybe even keep your house, even if you’re seriously behind on payments. Lots of properties in Charleston have been lost to foreclosure, but there are many ways to avoid it.
1. Bankruptcy:
This is usually the tool of last resort. If you’re being crushed by lots of debt, bankruptcy can be a good way to negotiate with lots of lenders at once. It’s a lot of work, and it won’t help you avoid your mortgage. Different lenders will treat your circumstances in unique ways. Just keep in mind that Bankruptcy is not a permanent solution to stop foreclosure. It provides a little more time for you to hopefully get caught up and get your finances in order before your lender petitions the Bankruptcy court to release the property and allow them to continue the foreclosure. The majority of folks that take this route are statistically not successful at avoiding foreclosure in the long run and then they are stuck with the two biggest black marks on a credit report and any new credit application, Bankruptcy and Foreclosure. Make sure that this isn’t just an easy method you want to use to delay the sale. Unless you have a lot of additional debt, it is usually best to tackle the foreclosure problem early to avoid having to use Bankruptcy as last ditch effort to stay in your house. You’d benefit from serious professional help – the best you can afford. Just keep in mind that Bankruptcy attorneys are also in business and may encourage you to file when it might not really be necessary or in your best interest.
2. Making Home Affordable (MHA) Program:
If your mortgage qualifies, you might be able to participate in one of the programs that are available through the US Dept of Housing and Urban Development (HUD) or a South Carolina Program that helps some SC home owners facing foreclosure. Any loans backed by Fannie Mae or Freddie Mac must be considered for MHA, and many other lenders choose to participate in MHA.
With MHA, your payments and/or interest rates might be lowered – even the principal balance (if your home is worth less than you owe). If you’re unemployed, you might be able to get your payments temporarily suspended or reduced.
MHA is a government program, so be prepared to deal with lots of paperwork and red tape. It ain’t free money – you gotta work for it. For more information about programs to help avoid foreclosure in South Carolina, visit HUD.gov
3. Negotiate with your bank:
Most lenders offer some level of assistance in regards to helping you keep your home or sell it even if you owe more than it is worth. You have to work hard at it and it requires a lot of supporting financial documents, but you may be able to get your interest rate reduced, or a temporary reduction in your payment.
Many times, lenders will want to steer you to refinance your loan – but by the time you’re a few payments behind, you probably don’t qualify for a new loan. However, there are loan modification and some other limited government programs that may be helpful in keeping your home if are resourceful and diligent. Sometimes they’ll be willing to add a few months of payments back onto the primary balance of your loan. It’s all dollars and cents to them, so remind them that you need their help to give them a lot more money in the long run. If they have to sell your house at a foreclosure auction, they’ll take a huge loss.
You have to work really hard to negotiate and apply for many of the programs. In my experience it is usually better to wait until you have all of their requested documents and scan them for your records, then both fax or email and then Fedex them overnight to the correct mailing address (be sure to check that). Don’t dribble in the documents at intermittent intervals as it will almost definitely slow down the approval process at best and at worst they will never assemble a complete package and the request will be denied or worst just kept “in progress” while the home continues to get closer and closer to a foreclosure auction. With that said, make sure you act fast. Usually it takes lots of calls and the patience of a saint to get through the bureaucracy. Never, ever act rude. Ask for help from everyone you speak with, but don’t sound desperate. Explain your situation, offer supporting documents, and reassure the bank that you want to live in your home for the long term.
That sounds obvious, but for some reason bankers seem to forget it when saying no to someone in need of help.
4. Request a Short Sale:
When you owe more than the home is worth and you are behind on payments, it may make sense for you to sell your Charleston home through a “Short Sale” and get a fresh start somewhere else without the need to pay the mortgage or the amount in the arrears. In most cases, a lender will accept less than the total they are owed to satisfy the amount you owe so that the debt doesn’t follow you. Other benefits are that you can avoid a full foreclosure on your credit, you have no closing costs to pay, you can continue to stay in the house for a few months while the short sale is being negotiated, you don’t have to make any repairs, avoid the embarrassment of having your home sold at auction, etc….there are other benefits as well. There are a lot more pieces to the short sale puzzle and it is best to have someone very experienced with the short sale process if you would like to explore this option. We are experts and our advice is free. Call 843-722-8937 for a brief, confidential consultation if you have any questions about short sales or the foreclosure process.
5. Borrow money from a private investor:
If you’re behind on your payments and need to sell fast, we can help.
In certain circumstances, we may even be able to help you stay in your home.
We work with homeowners in Charleston to find solutions to foreclosure problems.
We’ll let you know how we can help or give you our best advice to get you steered in the best direction.