Have You Considered a Settlement Of Your Mortgage Balance
A settlement is another great alternative option to consider when you are behind on your payments, your interest is too high and you can’t seem to get any relief, you just want to stop making your mortgage payments, or any other similar reason. If you want to consider doing a settlement with your mortgage company, they are often receptive to see and hear what it is that you are wanting to do. In addition, your lender might consider giving you a settlement because it can be less risk for them in tough times when so many mortgagees are going delinquent on their mortgage payments. They get to turn some of their assets back in to liquid at a discounted rate which can be put back into their company again.
The best time to consider doing a settlement with your mortgage company is when you have or can get the money needed to settle the debt, whether it’s liquid or not currently. As long as you can strike up a deal with them, and pay off your mortgage within a given time frame. For example, lets say you still owe $50,000 on your unpaid principal balance for your mortgage, and you are having trouble keeping up with your payments or you just do not want to have a mortgage payment anymore, but you have $30,000 set aside somewhere and you want to be through paying off your mortgage; just call up mortgage lender and make a proposal, the worst thing they can say is no, or that they need a more money to settle the account out. You can negotiate and find a middle ground on the settlement amount. Once that is completed and your payment is made, you are then reported to the credit bureau as “Balance Satisfied Less the Full Amount.” Mortgage companies have a legal obligation to report true and accurate information to the credit bureaus based on your credit transactions, it’s the law and they usually follow it.
A settlement is different from the other options. A settlement allow you to settle the property for less than the full balance owed on it, and still live on the property. Unlike a short sale which requires you to move out of the property once it is sold. It is all based on what the borrower is trying to accomplish in the transaction, are they looking to continue living in the home or are they wanting to move out after the transaction. None the less, these options can have positive results for the lender and the borrower alike.
I understand that many homeowners are after a loan modification, and are oblivious to many other good options out. There other options that can be as effective as a loan modification, but it is a different transaction that can be just as beneficial as the others depending on what the homeowner is out to accomplish. Take a Deed-in-Lieu of foreclosure, another great option that can be just as good as a loan modification. Mortgage companies are always thinking of ways to mitigate their losses and satisfy the homeowners as well as their share holders, as much as possible.
