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Steps to Avoid Foreclosure

As a resident and homeowner in Minnesota, you have a few different options for avoiding a foreclosure. You should contact your lender immediately to let them know you are in financial hardship and are currently unable to make your mortgage payments. Here are some of the possible options you may have:

1. Lender modifies down to affordable terms. Ie-dropping the interest rate and payents

2. Short Sale your home(required bank approval)

3. Deed in-Lieu of foreclosure

All of these options save your credit report and are better options than giving your house back to the bank.
The first option is the best if your lender is willing to modify your mortgage. Most will not agree to it if the property is not your primary residence or if you’re current on the mortgage. Most want to see the borrowers 3-6 months delinquent before they even consider a modification. Even then, the qualifications can be tough to meet, especially if you’re recently unemployed.

The third option is very seldom done since lenders typically don’t agree to it.

The 2^nd option is typically the best for the borrower. A short sale is an approval from the seller’s lender to agree to sell a property for less than what is owed on the property. Banks typically like to see the borrower late on payments, but is not always required. I recently sold a short sale home in Andover where the seller was never late on a single payment. The bank realized that the seller was in serious hardship and that he owned 100k more than the house was worth. The bank was willing to write off the debt and relief the borrower of his mortgage obligations. If you are considering a short sale, please check out my site for more information. I have successfully closed 100% of all the short sale listings I have received.

www.shortssalesmn.com

Steve Loraus
Realtor
Twin Cities Real Estate Group
612-387-1326
www.mnrates.com
www.stevesmnhomes.com