Homeowners in Default? We Can Help...


Are You in Default? How to Avoid Foreclosure…

The possibility of losing your home to foreclosure can be one of the most traumatic events in one's life. Knowing your rights and being able to find assistance can alleviate a great deal of stress. Foreclosure can come about for many reasons, such as job loss, death, marital problems, major unexpected repairs, illness or just plain poor money management.

Do not wait until you are several payments past due before seeking help !

The foreclosure process takes a minimum of three months and 21 days from the time that the lender decides to start foreclosure. Keep in mind that you still own the property until the foreclosure process is completed. Therefore, it is in your best interest to check into the options available to you to prevent the foreclosure, as well as options available during the foreclosure.


Bring your Mortgage Payments Current

The simplest, cheapest option to stop foreclosure is to bring your mortgage payments current. It is important to communicate with your current mortgage lender and to try and work out a repayment schedule of the amount of mortgage payments your behind. Your strategy should be to negotiate some workout to pay the arrears and make future monthly payments.

Refinance Your Current Mortgage

You may try to refinance your mortgage to bring it current and pay-off the lender. If you do not have "cash reserves" you should consider getting cash-out to insure you do not get into the same situation within a few months, especially if you know your financial situation is not changing. You may use this option, assuming there is enough equity in the home. Call Richard for more details at 909-525-7410. 

Mortgage Modification

You may be able to refinance the debt and/or extend the term of your mortgage loan. This may help you catch up by reducing the monthly payments to a more affordable level. You may qualify if you have recovered from a financial problem and can afford the new payment amount. 


Special Forbearance

Your lender may be able to arrange a repayment plan based on your financial situation and may even provide for a temporary reduction or suspension of your payments. You may qualify for this if you have recently experienced a reduction in income or an increase in living expenses. You must furnish information to your lender to show that you would be able to meet the requirements of the new payment plan.

Partial Claim

Your lender may be able to work with you to obtain a one-time payment from the FHA-Insurance fund to bring your mortgage current.

You may qualify if:
1. your loan is at least 4 months delinquent but no more than 12 months delinquent;
2. you are able to begin making full mortgage payments.

When your lender files a Partial Claim, the U.S. Department of Housing and Urban Development will pay your lender the amount necessary to bring your mortgage current. You must execute a Promissory Note, and a Lien will be placed on your property until the Promissory Note is paid in full.

The Promissory Note is interest-free and is due when you pay off the first mortgage or when you sell the property.


How do you know if you qualify for any of these alternatives?

Your lender will determine if you qualify for any of the alternatives. A housing counseling agency can also help you determine which, if any, of these options may meet your needs and also assist you in interacting with your lender. Call (800) 569-4287 or TDD (800) 877-8339.

Short Sale or Short Payoff

A Short Sale situation exists when a property is worth less than the sum of the existing liens on it. A Short Payoff situation exists when the owner/seller has little or no money to cover the shortage in escrow and must get the lender to agree to accept less than the outstanding loan balance as full payment for the debt in order to close escrow. In some cases, the seller may even qualify for relocation assistance funds. Richard provides this and will do a free evaluation of your scenario – no obligation - Call today - 909-525-7410.

Deed in Lieu of Foreclosure

As a last resort, you may be able to voluntarily "give back" your property to the mortgage company. This won't save your house, but it will help your chances of getting another mortgage loan in the future.


If all else fails, bankruptcy is an option that can stop foreclosure, at least temporarily, and give you some leverage to resolve the foreclosure.

Beware of scams!

Solutions that sound too simple or too good to be true usually are. If you're selling your home without professional guidance, beware of buyers who try to rush you through the process. Unfortunately, there are people who may try to take advantage of your financial difficulty. Be especially alert to the following:

Equity Skimming

In this type of scam, a "buyer" approaches you, offering to get you out of financial trouble by promising to pay off your mortgage or give you a sum of money when the property is sold. The "buyer" may suggest that you move out quickly and deed the property to him or her. The "buyer" then collects rent for a time, does not make any mortgage payments, and allows the mortgage company to foreclose. Remember that signing over your deed to someone else does not necessarily relieve you of your obligation on your loan.

Phony Counseling Agencies

Some groups calling themselves "counseling agencies" may approach you and offer to perform certain fee-based services. These could well be services you could do for yourself, without a fee, such as negotiating a new payment plan with your lender or pursuing a pre-foreclosure sale. If you have any doubt about paying for such services call a HUD-approved housing counseling agency.  

Here are several precautions that should help you avoid being "taken" by scam artist:

1) Don't sign any papers you don't fully understand.

2) Make sure you get all "commitments" in writing.  

3) Beware of any loan assumption where you are not formally released from liability for your mortgage debt and contracts of sale.

4) Check with a lawyer or your mortgage company before entering into any deal involving your home.

Delaying can't help. If you do nothing, YOU WILL LOSE YOUR HOME and your good credit rating.

Call now for your free, no obligation evaluation of your scenario!!!

Richard Harris


CA BRE #01712086


Disclosure: The information on this page is based on the California foreclosure proceedings. This information is provided for your use. It is not legal advice and we are not responsible for any damages incurred from the information contained within this website. Consult with your Attorney and/or CPA for legal and tax information.