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Foreclosure Avoidance Options for Home Owners

Foreclosure is one of the most devastating financial challenges that a family can face and one that many times can be avoided. The options available to residents for foreclosure are many, including but not limited to short sales. Following is a brief explanation of these solutions:

Reinstatement: A reinstatement is the simplest solution for a foreclosure, however it is often the most difficult. The homeowner simply requests the total amount owed to the mortgage company to date and pays it. This solution does not require the lender's approval and will 'reinstate' a mortgage up to the day before the final foreclosure sale.

Forbearance or Repayment Plan: A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back payments over a period of time. The homeowner typically makes their current mortgage payment in addition to a portion of the back payments they owe.

Mortgage Modification: A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these. These typically result in a lower payment to the homeowner and a more affordable mortgage.

Rent the Property: A homeowner who has a mortgage payment low enough that market rent will allow it to be paid, can convert their property to a rental and use the rental income to pay the mortgage.

Deed-in-Lieu of Foreclosure: Also known as a "friendly foreclosure," a deed-in-lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. Lender approval is required for this option, and the homeowner must also vacate the property.

Bankruptcy: Many have considered and marketed bankruptcy as a "foreclosure solution," but this is only true in some states and situations. If the homeowner has non-mortgage debts that cause a shortfall of paying their mortgage payments and a personal bankruptcy will eliminate these debts, this may be a viable solution.

Refinance: If a homeowner has sufficient equity in their property and their credit is still in good standing, they may be able to refinance their mortgage.

Servicemembers Civil Relief Act (military personnel only): If a member of the military is experiencing financial distress due to deployment, and that person can show that their debt was entered into prior to deployment, they may qualify for relief under the Servicemembers Civil Relief Act. The American Bar Association has a network of attorneys that will work with servicemembers in relation to qualifying for this relief.

Sell the Property: Homeowners with sufficient equity can list their property with a qualified agent that understands the foreclosure process in their area.

Short Sale: If a homeowner owes more on their property than it is currently worth, then they can hire a qualified real estate agent to market and sell their property through the negotiation of a short sale with their lender. This typically requires the property to be on the market and the homeowner must have a financial hardship to qualify. Hardship can be simply defined as a material change in the financial stability of the homeowner between the date of the home purchase and the date of the short sale negotiation. Acceptable hardships include but are not limited to: mortgage payment increase, job loss, divorce, excessive debt, forced or unplanned relocation, and more.

This represents only a summary of some of the solutions available to homeowners facing foreclosure. Locate a CDPE in your area for an evaluation of your individual situation, property value, and possible options.

Understanding your options now could mean all the difference in the world.
A CDPE can help. I can help....

Kit Sixel, Real Estate Broker, CDPE

Call me today: 541-954-1915




For Buyers:

10 Tips For Buying Bank Owned Homes and Getting a Great Deal

...go to HUD/Foreclosures now to set up an auto email alert for Lane County Foreclosures... 


1. Find a good Realtor that can assist you in writing and submitting your offer.

2. Get a Proof of funds letter or a pre-qualification letter from your lender.

3. Determine the value of the property. Your Realtor can create a CMA to help advise you on an offer price.

4. Look for properties that have been on the market for a significant time.

5. Offer 15%-30% below the banks asking price, if the property is in poor condition than your offer should be in the 30% range.  If the property is in fairly good condition you should offer roughly 15% below list price.

6. Offer $1,000 earnest money and a 30 day close with a 10 day inspection period. This will give you a “free look” for 10 days to get your contractor in and determine the cost of possible renovation.

7. Submit the offer asking for a response within 48 hours.

8. The banks will counter, expect it, don’t get discouraged.  Just raise your price slightly...

9. Make your 2nd offer/final offer 'Highest and Best.”  If they don’t accept the offer, be prepared to walk away.

10. Once the offer is accepted open escrow and start your 10 day inspection period.  Have a contractor note everything wrong with the property.  Have them write a formal bid to present to the bank on 7th day of the of the inspection period asking for a small price reduction.  Some banks will not respond and some will agree to the price decrease, this is just the last ditch effort to get the best possible price. If they don’t agree and the numbers work, then proceed to closing.


Some Lane County Distressed Properties Pictured Below....

Bank Owned Home on Large Lot    Short Sale with Views   Small Home Priced for Investors

Bank Owned Country Farms       Stately Homes with Views        Small Homes Priced for Investors

497 Oakway Road Suite 280 Eugene OR 97401
Office located in the Umpqua Building at the corner of Oakway and Oakmont, near the Oakway Center
Licensed in the State Of Oregon
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