Repair credit fast after foreclosure will NOT happen if local Palm Beach (FL) couple choose to let their bank foreclose & take the condo back.
Melanie Smits called me the other day, asking for advice.
Malanie and her husband Juston are planning to walk away from a condo (Melanie) purchased in October 2005 at the height of the housing market.
Let me stop right here. Do not just walk away. Please do not walk away until you explore all your options. Yes, you do have options.
And please do not fall victim to unlicensed “foreclosure rescue” scammers whose signs & ads litter the roads, newspapers & mailings.
These are desperate times, but please weigh all your options before giving way to foreclosure.
MELANIE & JUSTON’S OPTIONS BEYOND FORECLOSURE….
The condo…
Melanie paid $437,000 for this two-bedroom, two-bath 1,500-square foot ocean view condo that today might be worth $299,900 but losing value…by the day.
Melanie bought the condo before she and Juston got married…when she still had a good job and income.
Four months ago, she got laid off and Juston alone cannot afford the $3,200 a month payment.
They’re current on the payment but they’ve drained their meager savings and what’s left of Melanie’s 401k. It’s a race to the bottom for the housing market and the stock market.
Repeated calls to their two mortgage lenders Wells Fargo and Homecomings Financial (now taken over by GMAC) has been a waste of time. Melanie (and Juston) are current…and their lenders don’t want to talk with them.
Why? If you’re not aware of just how bad the housing market is spiraling downward, mortgage lenders are mailing out 285,000 default notices EACH month to homeowners 90 days behind in their mortgage payments.
You see, Wells Fargo and GMAC don’t have time to help Melanie and Juston.
Here’s a short list of viable options:
1. If you want to stay in your condo, negotiate a “write-down” on your current mortgage. Mortgage lenders are not advertising this option, but lenders will cut the amount you owe from $437,000 to $299,900. In turn, this will cut your monthly payment. You’ll end up “knocking off” the 2nd with GMAC (e.g. most of the $140,000 you owe to GMAC). Yes, this really is happening. It’s not easy
2. Don’t let your lender try to talk you in to a “workout” involving cutting your monthly payment (GOOD), only to add the difference (i.e. what they “cut”) to the backend of your outstanding balance. What kind of “workout” is this? This is what lenders want to do first.
3. If you’re not interested in staying in the condo, find a Realtor who specializes in negotiating a short sale settlement, where the condo is sold for less than you owe and each lender agrees in writing to the sale. No deficiency judgment…no debt collectors. Call or email me. If you’re in Florida, I can help you. If you’re outside of Florida, I’ll see if I can connect you with a REALTOR who can help you:
Mike [at] fixmyuglycredit [dot] com.
Respond to the foreclosure “complaint” paperwork if the lender(s) cannot produce the original NOTE.
By all means, stay in your home. Live rent-free. As shocking as this may sound, lenders with whom I’ve worked actually want you to remain in the home. Lenders know that if you remain in the house, you likely will keep the utilities turned on, the doors locked, the grass cut & the property free of vandalism or worse.
Of course, please get with a real estate attorney to confirm my experience. At the least, you’ll save months of mortgage payments as your Realtor sells your home, allowing you to “walk away” without regret or debt collectors chasing you. A “quick” short sale will take 4-6 months.
Unfortunately, I could not help Juston & Melanie beyond this help. I don’t work the Palm Beach area. In the Sarasota (FL) area, I have discovered strategies (through trial & error) that help people suffering through this horrible experience.
Repair credit fast strategies exist for you to use after foreclosure. However, PLEASE avoid foreclosure at all costs! What experience have you (or people you know) had with foreclosure or short sale? Without doubt, repair credit fast after foreclosure is not an option. Please don’t walk away.
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