The current financial crisis caused by the coronavirus has affected many in the housing market, with thousands of homeowners defaulting on their loans and facing foreclosure. If you’ve been financially impacted by the current crisis and are looking for options to avoid foreclosure, read on.
Provided the lender agrees, you can opt for a short sale. A short sale is when the bank allows you to sell the house for a substantial discount so that they can recoup a majority of what is owed. They get to avoid the legal formalities involved in the foreclosure and the burden of owning a home that will be difficult to sell.
After the sale, the bank may or may not choose to file a deficiency judgment to recover the remaining amount. They usually do not pursue litigation as it can be time-consuming. In such cases, the lender may recover as much as possible and cut their losses, thereby protecting your credit score. But if the lender chooses not to absolve you of the remaining loan, you still have debt hanging over your head.
Many lenders offer forbearance programs where you can temporarily halt repayment, and the lender agrees not to foreclosure the property. As of October 2020, around three million Americans have taken up forbearance plans due to the financial crisis. The program is designed to cater to situations like the current pandemic because it is a tool to help people get over a temporary crisis.
The lender may not ask for proof of hardship to approve a forbearance agreement if you request it because of the current pandemic. A verbal or written verification is enough. But a forbearance agreement is subject to approval from the lender. The CARES Act allows mortgage forbearance for up to a year. It also has several repayment options available to you once the forbearance ends. During this period, you may refinance your mortgage or sell the house.
Cash Home Buyer
The mortgage forbearance plan is subject to the lender’s approval, and it is also a temporary fix. If you are looking for a permanent solution to your debt problems and need to move on in life, consider selling to cash home buyers in Nashville.
We buy homes in Nashville for cash and as-is. We work with homeowners trying to avoid foreclosure, people dealing with bad tenants, couples in the middle of a divorce, and those who’ve inherited a home they don’t want to keep. Call 615-395 6709 for a free, no-obligation quote.