Are you in Foreclosure – or are you about to be?

You’re Not Alone

If you’re about to be overdue on your mortgage payments or are on the verge of foreclosure in Philadelphia, you’re not alone. According to the United States Census Bureau, 14%+ of borrowers residing in the Philadelphia Metro Area are behind on their mortgage payments.
The foreclosure of your home can be one of the most anxiety-provoking and complex processes you ever have to navigate, but it doesn’t have to be. This article will provide you with a 2-part Pre-Foreclosure Blueprint for what you can do right now to prevent a foreclosure and keep or sell your property.

PRE-FORECLOSURE BLUEPRINT

If you’re about to be overdue on your mortgage payments or are on the verge of foreclosure in Philadelphia, you’re not alone. According to the United States Census Bureau, 14%+ of borrowers residing in the Philadelphia Metro Area are behind on their mortgage payments.
The foreclosure of your home can be one of the most anxiety-provoking and complex processes you ever have to navigate, but it doesn’t have to be. This article will provide you with a 2-part Pre-Foreclosure Blueprint for what you can do right now to prevent a foreclosure and keep or sell your property.

Rule #1: Don’t Ignore Your Servicer.

Loss Mitigation. Under Federal Law (12 C.F.R. § 1024.39(a)), in most cases, a servicer must establish—or make a good faith effort to—contact delinquent borrowers within 36 days of the overdue payment. Upon making contact, the servicer has the duty to promptly inform you of loss mitigation options: alternatives to foreclosure such as a loan modification, forbearance, or payment plan. The only way to find out the options available to you is to communicate with your servicer.

Rule #2: Create a Budget.

To ensure you pursue the best loss mitigation strategy, it is critical to have a clear understanding of: (a) why you are behind on your payments; (b) whether it’s a temporary or permanent issue; and (c) what your income, expenses, and assets are. Towards this end, make a budget

TYPES OF LOSS MITIGATION

When you talk to your servicer and give them a clear sense of your situation, they will explain loss mitigation programs available and how to submit an application. Under Federal Law (12 C.F.R. § 1024.40(a)), servicers are required to maintain “Continuity of Contact,” which means they must assign personnel to you, remain accessible to respond to questions, and guide you through the loss mitigation process. There are three principal types of loss mitigation: a (1) Loan Modification, (2) Forbearance, and (3) Payment Plan. 

Type #1: Loan Modification.

Loan modification is a permanent restructuring of your current mortgage terms, such as reducing the interest rate, extending the number of years you have to repay the loan, or changing the type of mortgage, with the aim of lowering your monthly payment. Typically, this option is appropriate for homeowners facing long-term hardships. If you’re considering a loan modification, be sure to understand how the change will impact your monthly and total payments (short- and long-term).

Type #2: Forbearance.

Forbearance puts a pause on or reduces your mortgage payments for a limited period of time. Generally, this option is offered to borrowers facing short-term difficulties (e.g., illness, recent job loss), and provides flexibility to overcome the temporary issue and bring the mortgage current. Under the CARES Act, those with federal government backed loans (e.g., FHA, VA, USDA, Fannie Mae, Freddie Mac) are eligible for up to 1 year of forbearance if they are experiencing financial hardship due to the pandemic.

Type #3: Payment Plan.

Payment plans entail a temporary increase in your monthly mortgage payment, which enables you to pay a past-due amount over a certain number of months (e.g., 3-6 months). At the end of the payment plan, you would revert to your normal monthly mortgage payment. A payment plan is typically offered to borrowers who were facing a short-term hardship that is now resolved.
If the above options don’t seem realistic or you’ve exhausted all possible loss mitigation options with your servicer, this is a great opportunity to consider a Plan B—listing your property and selling on your terms. Rather than wait until your foreclosure is a few weeks from a sell date, where you’re likely to leave money on the table, you should begin this step early.
First, find out how much your home is worth. While you can use online home estimator tools, a real estate agent that conducts in-house CMAs will help you understand the true value of your property, which may be higher than you expect given the all-time low housing inventory in Philadelphia.
Second, pull up your mortgage statement and get a sense for how much you owe. Take your outstanding principal, interest, and late fees, add them together, and subtract that amount from your estimated sales price (including transaction fees). The goal here is to determine whether you have enough to pay off your mortgage, cover selling fees, and have cash left over to use toward your next home.
Third, consider hiring a real estate sales expert, preferably one who holds the Short Sales and Foreclosure Resource (SFR) Certification, who can guide you step-by-step through the process.
Last and easiest option:
Contact us TODAY for a quick CASH OFFER for your property.
NO commission.
Any condition.
Offer within 48 hours after visiting your property.

How to handle a potential foreclosure is an important decision, and we are here to help.
Whether you are pre-foreclosure, in the midst of a foreclosure, a we look forward to working together!

GrossmanGroupLLC.com | Office: 267-223-7788

Disclaimer: The content provided on this page is general consumer information, not legal or regulatory advice. The information above may include links to third-party resources. We do not endorse the third-party or guarantee the accuracy of this information.