Avoiding Foreclosure While Going Through A Divorce
Couples going through foreclosure and at the same time going through a divorce is no coincidence at all. Often times Divorce is the high price of families in the process of foreclosure and divorces can certainly increase the likelihood of foreclosures. While losing a marriage partner may have been a tough consideration in one’s life, many times the double edged sword is in losing a home to foreclosure. Married couples going through foreclosure should be aware and ask themselves a number of questions like: Who is responsible for the remaining debt on the home? How will the debt be repaid? What will happen to the house? Figuring out what you want to do with the home early on in the separation can help you avoid foreclosure. Your Options If One Person Wants to Keep The Home Refinance During a divorce a spouse may be able to refinance the property in his or her sole name. In this scenario, the co-borrower is released permanently from the debt. This however, is generally only possible when one spouse has sufficient credit and income to qualify and the other spouse agrees to give up the house. Loan Modification Oftentimes divorcees in the position of divorce settlements during foreclosure are unable to assume mortgage payments or refinance. In this case, it may be best to apply for a loan modification. With a loan modification a lender may arrange one or more conditions to reduce your monthly payment. Your Options If The Home Is Underwater and neither Person Wants to Keep the Home Short Sale In this transaction the divorced homeowners agree to sell the property for less than is owed on the mortgage. The difference between sales price and the total mortgage debt require that the borrowers remain jointly liable, though it may be possible to negotiate a reduced deficiency or offer a lump sum settlement to satisfy the remaining debt. Deed In Lieu of Foreclosure In this transaction the divorced homeowners agree to grant the title of the property to the lender in exchange for the lender releasing them from the mortgage. However, even in a deed in lieu of foreclosure transaction it is possible that a deficiency could exist with a deed in lieu. Sell the Home One of the best reasons to sell in this circumstance is having the ability to avoid foreclosure and Come away without any debt especially if your home has equity. You will need to hire a responsible agent with experience selling short sales or other homes during the foreclosure process. Seeking Help As with all foreclosure circumstances the earlier the act, the greater your chances for avoiding foreclosure and crippling mortgage debt. FAIR Program offers help to divorce couples who wish to apply for loan modifications, refinancing, short sales or sell during a foreclosure. Contact us to discuss your needs today.
