Foreclosure Workouts for Homeowners
What can a homeowner do when his lender has decided to start foreclosure proceedings? At this point, the homeowner still has options. The answer is a foreclosure workout plan. A foreclosure workout plan is a strategy for restructuring debt. It gives the homeowner an opportunity to bring his mortgage current without the lender having to seize the home in an attempt to recoup their losses.
There are several types of foreclosure workout plans. A few are included in the following:
• Repayment Plan
• Chapter 13 Bankruptcy
A repayment plan involves making larger payments for a specific amount of time. In addition to regular payments being made, an additional payment must be made. Of course, the homeowner must be able to show the lender that he has the necessary income to make such payments. Typically, the time period involved does not exceed 36 months.
A new loan is involved in refinancing. The same protocol is followed when the house was first bought. The same lender, or a new one, will handle the loan.
Recasting involves attaching overdue payments to the end of the loan, while regular payments are continuously made until the balance is zero. For this to occur, usually some aspect of the loan is modified – like its interest rate.
A foreclosure can be delayed or prevented by filing a Chapter 13 bankruptcy. This type of bankruptcy allows creditors to be paid by reorganizing the homeowner’s finances. All payments are supervised by the court. And, the homeowner usually has 36 to 60 months to pay the arrearage. Unless, the court grants the lender’s request that the mortgage not be included in the bankruptcy, which is called a lift of stay.
When faced with a foreclosure, it would be in your best interest to secure an attorney. Licari, Walsh & Sklaver, LLC, a Connecticut foreclosure attorney, can help you maneuver through the foreclosure. You need an attorney who has the expertise to navigate the foreclosure process. You need an attorney who can give you sound advice regarding your options. You need an attorney who knows the intricacies of the previously mentioned foreclosure workout plans. Licari, Walsh & Sklaver, LLC is that attorney.