February 1, 2011By Ray Marquez
Slipping toward foreclosure can be devastating. There are options available to help homeowners rescue themselves from the brink.

Short Sale

A short sale allows the homeowner to avoid foreclosure, minimize financial damage and move on from a burdensome, unaffordable mortgage. In many cases, a short sale allows the borrower to qualify for a new mortgage in just 24 months, compared to five years or more after a foreclosure.

A trained real estate agent can negotiate a short sale with your lender if you have meet certain qualifications


A reinstatement is the simplest solution for a foreclosure, however it can be the most difficult for homeowners to achieve. The homeowner pays the total amount past due (including late fees) to the lender. This solution will "reinstate" a mortgage up to the day before the foreclosure sale.

Forbearance or Repayment Plan

A forbearance or repayment plan involves negotiating with the mortgage company to allow the homeowner to repay back-payments over a period of time. The homeowner typically makes current mortgage payments in addition to a portion of the back-payments owed.

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 changes require lender approval and typically result in a lower payment for the homeowner and a more affordable mortgage.

Rent the Property

The homeowner must be able to rent the house for enough money to cover the monthly mortgage payment. There may be unexpected costs associated with the maintenance of a rental property in addition to the monthly mortgage payments.

Deed-in-Lieu of Foreclosure

A deed-in-lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process. The homeowner must vacate the property. Deed-in-lieu can potentially lessen the damage to a credit score and future loan eligibility, and sometimes the lender will forgo their right to pursue a deficiency judgment.


Many have considered and marketed bankruptcy as a "foreclosure solution" but this is only true in some states and situations. This does not require lender approval, but you must have non-mortgage debts that you claim as a hardship. Entering bankruptcy can be a risky and costly process.


As opposed to mortgage modification, refinancing means acquiring a new loan based on your current credit standing. If you have missed mortgage payments, your credit score may make it difficult to find a loan with cheaper payments.

Servicemembers Civil Relief Act

If a member of the military is experiencing financial distress due to deployment and that person can show that the debt was entered into prior to deployment, he or she may qualify for relief under the Servicemembers Civil Relief Act.

Sell the Property

Homeowners with sufficient equity can list their property with an agent who specializes in the foreclosure process. Unfortunately, many homeowners in today's market have experienced a decline in home value and may owe more than what the home is worth.

This is a summary of the solutions available to homeowners facing foreclosure. Call me today; as a CDPE (Certified Distressed Property Expert) and a certified HAFA (House Affordable Foreclosure Alternative) specialist I am well-qualified to help.

Ray Marquez, a retired firefighter, has sold real estate in the Chino area for over 29 years. As a Certified HAFA Specialist and a CDPE, he is well-qualified to work with people facing foreclosure.


One thing to add here... there are potential deficiency actions when notes are not paid in full... which is a topic better covered under a legal article as opposed to real estate broker/agent article... my two cents? before signing documents that have thousands and thousands of dollars in the small print, consult an attorney to learn your rights and liabilities... the fee for an hour or so of attorney face to face time is well worth it.

Posted by PaulMolinaro on 02/03/11, 11:03 AM

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