Avoiding Foreclosures on Cape Cod

CapeCodToday.com reports a 42% increase in foreclosure filings in Barnstable county was seen in 2007 compared to three years ago. How can foreclosure be avoided and what can you do if it comes to the point where loss of your home is likely?

One way for Cape Cod homeowners to avoid foreclosure is a "short sale" in which the lender accepts less than the total amount due to payoff a mortgage. Lenders sometimes see this as a more favorable alternative to a foreclosure since taking over homes in a declining market is not something banks like to do. For the homeowner, avoiding foreclosure can save time, money and credit damage.

Your Cape Cod real estate agent will need to agree to a reduced commission rate which makes the banks more willing to work with you.

A downside is that you may be taxed on the forgiven amount as taxable income by the IRS.

For buyers of short sales on the Cape, there are benefits as well as risks. while the benefit might be a lower price, you might have to wait for the seller's lender to approve a short sale. Lenders will often wait until there is an accepted offer on the property before they will consider a short sale. What this means to buyers is closing delays.

Freddie Mac suggests the following other options to avoid foreclosure:

• Forbearance is an agreement to temporarily let you pay less than the full amount of your mortgage payment, or pay nothing at all, during the forbearance period. Mortgage companies may consider forbearance when you can show that funds from a bonus, tax refund, or other source will let you bring the mortgage current at a specific time in the future.

• A reinstatement occurs when you pay your mortgage company the total amount you are behind, in a lump sum, by a specific date. This is often combined with forbearance.

• A repayment plan is an agreement that gives you a fixed amount of time to repay the amount you are behind by combining a portion of what is past due with your regular monthly payment. At the end of the repayment period you have gradually paid back the amount of your mortgage that was delinquent.

• A loan modification is a written agreement between you and your mortgage company that permanently changes one or more of the original terms of your note to make the payments more affordable. Common loan modifications include

• Adding missed payments to the existing loan balance

• Making an adjustable-rate mortgage into a fixed-rate mortgage

• Extending the number of years you have to repay

Read more about foreclosures.


--
Lee Wareham - REALTOR®, TRC, e-PRO
The Tucker Group
Kinlin Grover GMAC Real Estate
193 Cranberry Highway - Route 6A
Orleans, MA 02653
800-275-9210 x141, 774-313-6091 Mobile
508-255-1489 Fax
mailto:lwareham@kinlingrover.com
http://LeeWareham.com

http://www.CapeTuckerGroup.com - The Tucker Group Cape Cod Real Estate Team Website

http://LoCape.com - a new "narrow search" local search engine - indexing lower Cape Cod websites only. Brought to you by the Tucker Group.

http://SearchCapeCodRE.com – sign up for daily email alerts and search MLS listings!