Viable relief options for Underwater Homeowners
BY LISA SCONTRAS
No matter how late homeowners may be on their mortgage payments, there are usually alternatives to the long-lasting effects of falling into foreclosure.
“Oftentimes distressed homeowners do not realize they have other options,” says Michelle Lynch, short sale program director at Prudential Locations. “Too often, the anxiety associated with missed mortgage payments and the fear of putting trust into the wrong hands cause homeowners who are heading toward foreclosure to avoid seeking help.”
Since lenders lose more money when a home is foreclosed, they’re motivated to avoid such a fate. The federal government also provides incentives to lenders who work with homeowners through a plan called Home Affordable Foreclosure Alternatives Program.
Here’s how Lynch and her team of 21 agents can help homeowners facing financial hardship. Team members, who are Certified Distressed Property Experts, specialize in 13 foreclosure alternatives, and have developed a 52-step process to assist homeowners navigate through this difficult and emotional process. The foreclosure process is lengthy, allowing time for the team to help homeowners analyze their next steps.
One option is a short sale.
A short sale occurs when the current market value of a home is less than what is currently owed on a mortgage. A real estate agent negotiates with the lender on behalf of a financially strapped homeowner to accept a loan payoff that is less than the amount owed.
“While lenders were once reluctant to negotiate short sales, the current glut of foreclosed properties on their books has prompted an aggressive push to mitigate losses, and some are even paying homeowners significant cash incentives to make a fresh start on their lives after the close of the short sale,” explains Lynch.
Typically, short sales can take up to six months to process, and many don’t close because participants don’t understand what’s required to put a proper package together for the bank’s consideration, Lynch says. If a short sale offer with the bank fails, so does the potential resolution for the homeowner. This is why you need a specialist.
A foreclosure can impact you in many ways. It may harm your chances for future employment, affect your credit score and history, as well as your ability to obtain a security clearance. It can even make you a target for deficiency judgment costs where you are on the hook for money not recovered by the lender in the ultimate sale of your property.
“We have counseled hundreds of homeowners and save a lot of them from foreclosure,” she says. “Our short sale real estate professionals walk them through the process one step at a time, holding their hand along the way. And it’s so rewarding. We don’t stop until we find resolution.
Lynch and her bi-lingual team members keep up with current industry guidelines, stay up to date on the market, trends and bank and government initiatives, and are committed to having the highest level of information and resources available for their clients.
“We specialize in foreclosure avoidance, with a particular emphasis on short sales,” she says. “When it comes to short sales, we have a proven system in place to close these complicated transactions as quickly as possible. It is our commitment to struggling homeowners and to our community.”
Lynch and her team get a great sense of satisfaction by helping homeowners who have fallen victim to the current economic crisis.
“Many people confess they didn’t think they had any options when they first came to us,” Lynch says. “It’s a very scary place to be. We let them know they are not alone and we are here to help.
“Bottom line, if you have the right information with a good package and you submit it properly to the bank, short sales aren’t only closing, they’re closing quickly,” Lynch says.
Prudential Locations Short Sales Team is holding a series of seminars titled “Help for Distressed Homeowners” Oct. 29 at the Ewa Community Church. The sessions are free and there is no obligation if you attend.
“The purpose of these seminars is to bring awareness to those in need of alternatives to avoid foreclosure, and when appropriate, help them with their short sale listing needs,” says Lynch. “Our goal is to reach out to as many homeowners as we can to make sure they have all the resources they need to make the best decisions possible.”