If you are having trouble making your house payment and wondering what your options are, here they are in a nutshell:
When attempting to get your lender to modify the original terms of your loan, you may want to hire a lawyer or law firm to help you get it modified - but it is possible to get your loan modified without the help of a lawyer thanks in part to the Making Home Affordable program. The loan modification process is long, complicated and many people end up frustrated and moving on to one of the other options (short sale, deed-in-lieu or foreclosure) because they were unable to get their loan modified.
A short sale usually occurs after trying to get your loan modified and not being able to do so. If you are attempting to short sell your home, you may want to hire a lawyer to help you review the final paperwork because of various state's anti-deficiency statutes - or in other words, the laws of your state as to whether or not the lender can come after you for the difference. I have heard many stories recently of lenders "slipping in" a promissory note expecting the person short selling their home to pay it and many homeowners agree to sign it - even though they are not legally required to do so.
Deed-in-Lieu of Foreclosure
If you are unable to short sell your home, you may be able to negotiate a Deed-in-Lieu of Foreclosure with your lender. A Deed-in-Lieu is basically where you agree to vacate the property and leave it broom swept clean and the lender agrees to take over the property. The difference between Deed-in-Lieu and Foreclosure is that with a DIL, once you hand the property over to the lender, they will stop reporting negative items on your credit. I always recommend hiring a lawyer to help you if you get to this stage.
The final possibility is Foreclosure. Each state has different foreclosure laws, so if you are going through foreclosure, I reccommend that you hire an experienced attorney who can help you know your rights throughout the process.
Because after all, there is nothing more expensive in life than cheap legal advice.
Justin McHood is a loan officer living in the Phoenix, Arizona area. You can find Justin on Facebook, Twitter, ActiveRain or LinkedIn and he is happy to answer any mortgage-related questions that you may have.