● Nonconforming mortgage loans : Borrowers may consider easier qualifying nonconforming loans that aren ’ t purchased in the secondary markets by Fannie or Freddie which include : FHA ( FICO credit score allowances in the 500 range ), VA , NonQM ( Qualified Mortgage ), and Private Money that may allow much higher debttoincome ratio allowances and / or no formal income documentation requirements such as with Stated Income products ( bank statements or profit and loss statements in lieu of W2s or tax returns ).
● Forbearance agreements : The lender agrees to postpone or delay their foreclosure actions with the delinquent borrower . Sometimes , these foreclosure postponements may last months or years .
● Deferment : The lender agrees with the borrower ’ s request to delay or defer their delinquent payments until a later date . In some cases , the late payments and penalties are added years later when the loan may become all due and payable .
● Loan modification : The lender or mortgage loan service company agrees to reduce the existing interest rate and / or monthly payment amount so that the mortgage is more affordable as a way to avoid foreclosure .
● Loan repayment plan : Both the lender and borrower mutually agree to add unpaid delinquent payments and late fees to the existing mortgage which may slightly increase their monthly payments or increase the loan term to give the borrower more time .
● Reinstatement : After the borrower and lender agree to modify the monthly payments to avoid foreclosure , the loan is removed from foreclosure status and reinstated in “ good standing .”
● Sellerfinanced sales : If the homeowner needs a quick sale to a new buyer who can effectively take over his monthly mortgage payments and give the seller some much needed cash , the seller may consider creating some type of wraparound mortgage { i . e ., contract for deed or allinclusive trust deed ( AITD )} or “ subjectto ” property transfer in which the buyer receives the deed to the property that is “ subjectto ” the existing mortgage still secured by the property .
● Short sale : If and when the mortgage debt is greater than the current market value for the property ( aka “ upsidedown ” mortgage ), the homeowner may consider contacting an experienced local Realtor who can help negotiate a discounted mortgage payoff with the lender when they find a qualified new buyer .
● “ Cash for Keys ”: During the depths of the last major national foreclosure crisis between 2009 and 2013 especially , lenders were offering delinquent homeowners upwards of several thousand to $ 25,000 + to vacate the home while not damaging it or removing appliances . Quite often , the homeowner hadn ’ t made a mortgage payment for months or years up until this “ Cash for Keys ” offer . For many lenders , this cash payment to struggling homeowners was considered more affordable for the lender than fighting the homeowner for months or years longer .
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