What other loss mitigation options are out there?
Unfortunately, for some of my clients, securing a loan modification or a short sale approval is not an viable loss mitigation option. I am often asked, “what other loss mitigation or foreclosure alternatives are out there?” You still may have options – from bankruptcy to a consent judgment – and that is why it is important that you hire an attorney who is familiar with the foreclosure process and the strengths of your case. If you have active foreclosure litigation going on, and are getting nowhere with your lender, speaking with an attorney can get rid of a great deal of stress and you may be able to explore the following options in you foreclosure case:
Filing bankruptcy is not the black spot it used to be. Now it is a common remedy to getting out of bad debt – including mortgage or HOA foreclosure. Whether you want to keep the property or surrender it back to your creditor, the bankruptcy code is a very versatile tool that may be used to wipe out credit card debt, mortgages, and financial obligations.
A deed in lieu of foreclosure is now becoming a popular option that homeowners seek out. A deed in lieu is incredibly rare because many homeowners took out second mortgages which makes deeding the property back to the first lender very difficult. Still, I have seen it be a successful foreclosure alternative. If you cannot obtain a loan modification or a short sale, this may be a viable option.
If you are currently involved in a foreclosure lawsuit, a consent judgment may be an option that allows you to walk away from the home, and the lawsuit. In good faith, this option should only be accepted where it includes a deficiency waivers in exchange for giving the bank the right to foreclose on the property. This is a rare settlement option, and can be secured along with relocation assistance. If you are interested in this type of settlement option, and are currently involved in an active litigation, you can set up a consultation to review your options.