Exit Solutions

There are several options available to help you listed below. 
These options are separated into two sections - keeping your home or selling your home.

MAKING SENSE OF IT ALL 

Keeping your home 

 Loan Modification
Today, everyone needs some mortgage payment relief...but that doesn't mean it is available to everyone.  There are 2 very different types of loan modifications.

Standard Loan Modification requirements:
This modification requires a recent financial hardship and typically reduces the interest rate to somewhere between 5% and 6% for a specified period of time, but depending on the situation, can be lower than 5%. This type of modification generally takes 1-4 months to complete.  If your loan is currently owned by FNMA or FMAC, President Obama's plan of March 4, 2009 does set a "floor" of 2% interest on loan modificaitons.

Principal Balance Loan Modification:
This type of loan modification actually REDUCES your principal balance to what is deemed the "current value". This is dependent on the loan being "sold" and the investor/purchaser actually doing the modification for the homeowner.  This does take much longer (6-12 months).

Refinancing

Loan Refinance (Home with Equity)
YOU May be able to arrange new financing. This will depend on your income, credit, value of your home, amount of your equity and your current financial position. Although it might be difficult to secure new financing with a default on your existing mortgage, it is not impossible.  Again, President Obama's plan does require you are current on your FNMA/FMAC owned loan to qualify for this option.

FHA Streamline (Home With Equity)
Requires a current FHA loan and overall good credit standing, but involves less paperwork as it is simply refinancing to a lower rate under a special FHA program with no appriasal requirement.

Short Refinance (Home with NO Equity)
Similar to the Short Sale only instead of selling, You are doing a refinance and negotiating with your current lender to take less of a payoff in order to complete the refinance. If you are behind in payments it will not work. 

Direct Lender Options

Reinstatement Plan
Basically this means paying the total amount that is past due, including late fees and attorney costs, to bring your payments to a current status by a specific date.

Repayment Plan
The most common way to bring a loan current is the repayment plan. Many lenders will require up to 50% of the past due balance to be paid as a lump sum and then a portion of the remaining balance owing is added to your monthly payment over a period of time to allow it to be brought current.  This is ususally a 3-12 month plan.   While this sounds great, in many cases this is just not possible. After all, if you had 50% of the past due balance, you probably would not be that far behind.

Loan Forbearance
Loan Forbearance is a agreement between you and the mortgage company allowing you to delay or reduce payments for a short period. Some lenders may agree to combine your Forbearance with Reinstatement or a Repayment Plan if you can bring your account current by a specific date. This plan is most common for people who just experienced a major expense increase or loss due to a unexpected life event.