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Know Your Options:
More than a million homeowners have been helped by the Making Home Affordable programs (HAMP). Homeowners in the program typically save more than $500 each month through mortgage payment reduction. If you are having a tough time making your monthly mortgage payments, request a home affordable modification today. Many Delawareans have experienced mortgage financial relief through the HAMP programs as well as other home retention options.
Modification – A loan modification is a permanent change to your current mortgage. You may qualify to have your first and second mortgage modified to reduce your financial stress.
Repayment – This option is best for homeowners that can afford to make their full mortgage payment plus extra for 4-6 months to bring their mortgage current. Never agree to this option if you know that it is unaffordable!
Forbearance – The servicer may allow you to delay or forego payments for a short period of time (usually no longer than six months) with the understanding that another option will be used afterwards to bring your account current. During the forbearance period, the mortgage remains past due with accumulating interest and late fees.
Short Sale – If retaining the home is not an option, a short sale or deed-in-lieu may be options before the servicer starts foreclosing on the home. A short sale is when the servicer lets you sell your home for an amount less than, or “short”, the amount that you still owe on the mortgage. Consult a CPA to see if you may have to pay taxes on the difference between the short sale price and the current balance of the mortgage.
Deed-in-lieu (DIL) – A deed-in-lieu is a transaction where the servicer allows you to give the title to the home to them. If the servicer approves you for a DIL, you will be transferring ownership to them and will have to vacate the home. Ask the servicer how soon you will need to move out of the home. Consult a CPA to see if you may have to pay taxes on the remaining balance after the servicer sells the home.