Foreclosure Solutions
Z & Z Group has been serving the community to promote broad homeownership and to qualify clients to obtain mortgage loans for the purchase of new homes and to refinance their existing mortgages. Our reputation has been built on our integrity, honesty, professionalism and service excellence. We recently joined with several partners in order to offer services designed to alleviate and eliminate issues relating to foreclosure. Z & Z Group continues its goal of helping individuals retain their homes and their financial health.
Our Mission
Unfortunately, not all the players involved in the mortgage industry are concerned with assisting clients or promoting a relationship built on trust and professionalism. As a result, many mortgage companies have gone out of business and many more are eliminating mortgage programs for those people with less than perfect credit or those who cannot fully document the sources of their income. Many of the people affected by this turn of events are now faced with an inability to refinance their mortgage loan and the possibility of foreclosure.
Our staff of trained specialists can evaluate your financial situation and offer you all available options to stop foreclosure and reestablish your credit.
How We Can Help You?
When you fall behind on your Mortgage Loan payments you are in default of your contractual obligation under the Mortgage and Note Agreements with the lender. Your lender will generally attempt to contact you by telephone, mail or e-mail in order to inform you of the default and to request payment. Remaining in default for more than a few weeks will usually generate more attempts by the lender to contact you and to determine the reasons for the continued default. The frequency of these attempts will likely increase as the default continues. In most states, lenders will not allow a default to continue for more than 3 or 4 months before beginning Foreclosure proceedings.
Your lender will not stop the Foreclosure or put you into a program to bring your loan up-to-date unless you can demonstrate that you will be able to make timely payments under the new agreement. Although lenders would prefer not to Foreclose against your property, they do not want to have to begin the process all over again should you default under the new agreement.
Most lenders will consider a Loan Modification, Deferment, Forbearance or a Repayment Plan as a first option to quickly bring the loan current. Our Foreclosure Specialists will use one of those options or perhaps a combination of those or any of the options below to develop your personalized strategy to stop Foreclosure and to prevent any further damage to your credit.
Every homeowner's situation is unique and each lender has their own procedures. Our extensive experience with mortgage lenders allows us to avoid the delays and pitfalls that many homeowners encounter while trying to work things out directly with their lender. After performing a thorough evaluation of your finances and formulating a plan, our professional loss mitigators will negotiate with your lender to get you the best possible solution to your home foreclosure problem.
The most common types of solutions are:
Repayment Plan
Homeowners who have suffered a temporary financial hardship, causing them to default on their mortgage payment may be able to benefit from a Repayment Plan. Under this arrangement, the past-due amount is divided into monthly payments to be made in addition to the regular mortgage payment.
Homeowners must demonstrate that the circumstances surrounding the financial hardship no longer exist and that the homeowner can afford to make the payments. This solution is generally considered within 3 or 4 months of the default and prior to Foreclosure.
Reinstatement
Once Foreclosure has been initiated by the lender, past-due amounts as well as late fees and Attorney costs may be too large to repay in addition to regular monthly payments under a Repayment Plan. By agreeing to make a lump-sum payment of the outstanding amounts by a certain date, homeowners can stop Foreclosure and have their mortgage payment schedule reinstated by the lender.
The Reinstatement amount is the total amount that is past-due as well as late fees and Attorney costs. In evaluating homeowners' ability for Reinstatement, we analyze what funds or assets are available to the homeowner and/or whether they may be able to obtain an institutional, government or private loan for the Reinstatement amount.
Loan Modifications or Loan Restructuring
For homeowners who are unable to make additional monthly payments or a lump sum payment to bring their mortgage payments current, we will attempt to negotiate a Loan Modification plan. Under this program, all outstanding amounts are rolled into the existing principal balance and loan length or interest rates are changed so that the homeowners can make the new monthly payments.
This program reflects a new mortgage agreement between the homeowner and the lender and requires that property taxes, homeowners insurance and other liens are being paid current. Additionally, any other liens against your property must be subordinated (placed behind) to this new first mortgage.
Homeowners with VA loans may be eligible for a special type of Loan Modification program called Refunding. The VA will purchase the loan from the current lender to exercise options that your current lender could not consider to prevent Foreclosure. When the VA refunds a loan under 38 U.S.C. 36.4318, the delinquency is added to the principal balance and the loan is re-amortized.
Loan Refinance
For homeowners who qualify and have the necessary equity in their property, we can arrange for a refinance of their current home mortgage loan to terms that are more favorable. We are licensed by the New York State Banking Department as a Mortgage Banker and can utilize our relationships with national mortgage lenders as well as our own funds to find you the the most favorable terms for your refinance.
Forbearance
With payment Forbearance, we negotiate with the lender to delay or reduce payments temporarily so that you can arrange for either a Repayment Plan or Reinstatement Plan. Under this program, the lender will temporarily stop Foreclosure proceedings to give the homeowner the opportunity to arrange for a permanent solution.
Generally, this program is used in situations where homeowners have suffered a temporary financial hardship and need time to recover and get back on track.
If a homeowner has an government insured mortgage loan, a Special Forbearance may be possible under either an FHA or VA program. Generally, a homeowner cannot be more than 1 year behind on their mortgage payment to take advantage of this option.
Partial Claim (for FHA Loans only)
For homeowners with FHA insured loans, we may be able to negotiate with the lender and the Department of Housing and Urban Development (HUD) for a Partial Claim. Under this program, the lender will agree to help you with a one-time payment from the FHA Insurance Fund as long as the homeowner is no more than 12 months behind on mortgage payments and is now able to make full mortgage payments.
Under this program, HUD will give you an interest free loan to bring your account current immediately. Homeowners are required to sign a promissory note with HUD so that it can place a lien on your property as a second mortgage. Repayment of this interest free loan does not begin until the first mortgage has been paid off or the house is sold.
Pre-Foreclosure Sale
For homeowners who are able to arrange for the sale of their house before a Foreclosure sale has occurred, we can negotiate with the lender to suspend the Foreclosure to allow the sale to occur. With this option, we may be able to convince the lender to waive certain fees and charges that have accrued due to the Foreclosure.
Short Sale ****
Also known as a Short Payoff, this program is available to homeowners who wish to sell their house but cannot sell it for enough to pay the entire amount owed to the lender. Due to the fall in housing prices many homeowners may owe more to their mortgage lender than they can get for their property. We can negotiate a Short Sale with the lender in which the lender will accept an amount less than what is currently owed. The difference between what is owed and what has been paid may be negotiated or forgiven.
In order to qualify for this program, most lenders will require proof that the property was listed unsuccessfully with a Real Estate Broker for several months and that there is a qualified buyer ready, willing and able to purchase the property. If approved, the lender will temporarily stop the Foreclosure to allow the sale to proceed.
Negotiating a Short Sale with the lender is a long and difficult process since the lender must evaluate both the buyer's financial situation as well as the potential value of the property. It also requires the approval of senior management, which adds to the red tape and delay.
Homeowners should be aware that this program may involve certain tax implications depending upon the manner in which it is negotiated as well as the laws of the State where the property is located. However, it is a valuable option for a homeowner who is seeking to relieve themself from further financial obligations to the lender and any further damage to their credit.
Real Estate Professionals can utilize this program to facilitate sales of properties that have been sitting on the market for long periods of time. Although lenders have historically been hesitant to accept the loss associated with a Short Sale, due to the overwhelming number of foreclosures and the huge losses asociated with retaining ownership of the property, lenders are more open to this program today.
Deed-in-lieu of Foreclosure
For homeowners who are unable to sell their property (even by Short Sale) or make arrangements to repay their mortgage loan, a Deed-in-lieu of Foreclosure may be the only option available. Under this program, the homeowner may transfer the ownership of the property to the lender by Deed in exchange for a discharge of their financial obligation to the lender. This arrangement requires the consent of both the homeowner and the lender. It avoids the costly and time consuming elements of a formal Foreclosure and causes less damage to the homeowner's credit than an actual Foreclosure.
Negotiating a Deed-in-lieu of Foreclosure is a time consuming and complicated process. In fact, since the lender is accepting the property and discharging the either all or part of the debt owed, it is the riskiest option for lenders, who may be left with a property that they are unable to sell without great financial loss.
To qualify for this program, homeowners will need to demonstrate that they have attempted to sell the property through a Real Estate Broker and have been unsuccessful in doing so and are also unable to arrange for a Short Sale.
Don't Sit Back and Wait
If foreclosure is initiated against you, doing nothing will work against you. In states where foreclosures do not require judicial action, you may be evicted from your own house after 4 or 5 missed mortgage payments. Even in states with historically lengthy foreclosure proceedings (ie. New York), both lenders and their attorneys have been taking a more aggressive approach. Foreclosures that used to take 1-2 years are now being completed within 6 to 9 months. The timeline below indicates the different stages in the process.
What You Should Do Next?
Although you may be able to negotiate directly with the lender yourself, be aware that lenders are not primarily interested in making things easy for you. Their first priority is attempting to get the most money from you under any arrangement. You may find that what you have ultimately agreed to will leave you with the inability to pay for other expenses and ultimately to a further default.
Be aware that if you fail to comply with the terms of any new arrangement that you have made with the lender, it will difficult to change the terms again. Lenders will generally give you a second chance. However, do not count on a third chance.
Not all states have the same procedures for foreclosure. It is important for you to know what your State's Foreclosure Laws are in order to properly negotiate with your lender.
Please call our office today to speak with a Foreclosure Mitigation Specialist for a free consultation.
