In Florida, defending your home or condo against a foreclosure is something that requires a strategy designed specifically for your facts and circumstances. Different strategies should be pondered, investigated, and weighed. Each homeowner may have different options open to them, and different remedies available to them. There’s lots of chaos down a the courthouse and Florida law is far from stable these days: Florida foreclosure defense attorneys have lots of considerations to discuss with their clients.
Here are some examples of Florida Foreclosure Alternatives available to Florida home owners:
1. Making Home Affordable © (MHA) Program.
Here, certain home owners stay in their home while getting lower mortgage payments and mortgage interest rates that are in line with today’s lower rates. The MHA Program includes several federal options that you may have heard about already, including HAMP and HARP.
2. Home Affordable Modification Program (HAMP)
For eligible home owners, HAMP modifies the mortgage payment to around 30% of your verified pre-tax monthly income. There’s also a version designed just for Veterans (HAMP – VA).
3. Principal Reduction Alternative Program (PRA)
If you qualify, the Principal Reduction Alternative (PRA) program will let those who are severely underwater on their homes to renegotiate their home loan to a mortgage amount that is closer in line to the new, present value of their property.
4. Home Affordable Refinance Program (HARP)
Under the Home Affordable Refinance Program (HARP), those who have kept up their monthly mortgage payments may qualify to refinance their mortgage into a loan that is easily to handle.
5. Home Affordable Unemployment Program (UP) or Forebearance for Unemployed Homeowners Program
If you are out of work and unemployed then either the Home Affordable Unemployment Program (UP) or the FHA’s Forbearance for Unemployed Homeowners Program may be able to help you with doing things like putting your mortgage payments on hold for up to a year, giving you time to get a job without being considered in default on your home loan.
6. Home Affordable Foreclosure Alternatives Program (HAFA)
Home Affordable Foreclosure Alternatives (HAFA) is a federal program for people who are behind in their mortgage payments, and helps the home owner negotiate a short sale or deed-in-lieu of foreclosure as an alternative to foreclosure and includes a waiver of a deficiency judgment.
7. Reinstate the Mortgage – aka “Call Dad”
Sometimes, home owners get behind because of short term life crises and with help from loved ones or by selling assets, they can bring their mortgage current along with paying the fines or fees that have been assessed by their lender.
8. Negotiate a Bank Loan Modification with the Lender
Here, the home owner sits down with a bank representative (this is not a government sponsored modification – see options 1-6 above) and works out a new payment plan. Whether this will include a balloon payment, a lower interest rate, a reduction in the loan amount, a recognition of a new property value, etc. depends upon the individual case.
9. Refinance the Place (Get a New Lender)
Here, the Florida home owner has a great credit report and the ability to find another mortgage lender that is happy to have them as a customer in a refinance of their home. The new mortgage pays off the old one. Hopefully, with better terms for the owner.
10. Rent Out The Place
Florida is a beautiful place and if the home owner or condo owner has the right property in the right location, then there may be lots of tenants who would be interested in renting out the home as their own.
Larry Tolchinsky’s Tip:
These are not one size fits all kinds of choices. No Florida home owner is going to find all ten of these options good for his or her situation, nor will they really be able to choose between them. It is unlikely that anyone is eligible for all ten choices here, each case has to be considered and the alternatives to foreclosure that are best for that home owner need to be decided.
For example, rent may seem like a great idea – but that’s only going to work if the rent payment is high enough to cover the mortgage payment (and probably the property taxes, insurance, and/or HOA fees). If the rent you can get isn’t high enough, then maybe it’s better just not to rent the home to a third party. Landlords have their own headaches to consider.
Another example how these alternatives aren’t so simple: asking your parent to help you out may have financial good sense, but the realities of your relationship or perhaps your parent’s financial situation mean this really isn’t a good solution for you. Maybe your parent is recovering from a serious illness and doesn’t need the stress; perhaps your father makes The Great Santini look like a cupcake.
Finally, this list isn’t complete. There are other Foreclosure Alternatives out there than just these ten. Short sales, for example. Courtroom fights against the validity of the mortgage, another one.
As we discuss with regularity here on this blog, Florida law is in flux right now – Foreclosure Fraud has made a mess of things in many ways, and we dealing with the Wild Wild West in foreclosure cases now. It’s important to work with an experienced Florida foreclosure defense attorney to determine not only what your options are but what is the best choice for you.
Maybe fighting back is a great idea for you (more on that next week). Maybe making a deal with the lender as fast as you can works for you (negotiations will depend a lot upon which bank is at the table). More foreclosure alternatives are being created in courts here in Florida and across the country every day. You have choices.
Do you have questions or comments? Then please feel free to Chat with Larry in the comments below, at firstname.lastname@example.org, or (954) 458-8655. If you have a specific situation, please call or email Larry because he can’t answer specific fact questions in general comments. He’s happy to take your call.