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Alan Russell

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10 Ways to Alleviate the Stress of an Unaffordable Mortgage

As a CDPE, I can navigate a homeowner through a variety of options. Below I’ve listed some of the most common alternatives to foreclosures that homeowners can choose from:

Short Sale

·· BenefitA short sale allows the homeowner to avoid foreclosure and salvage some of their credit rating. This also keeps foreclosure off the individual’s public record, and in many cases will allow the homeowner to avoid a deficiency judgment. Borrower may qualify for another mortgage in as little as 24 months (as opposed to five years for a foreclosure).

·· DrawbackShort sales can be a trying process in which a homeowner is best served by contracting with a qualified real estate agent to guide the way.


·· Benefit: Does not require the mortgage company or lender’s approval.

·· Drawback: Requires that a homeowner be able to pay all back payments and fees.

Forbearance or Repayment Plan

·· Benefit: Allows the homeowner to make back payments over time.

·· Drawback: Requires that a homeowner be in a financial position to pay not only their current mortgage, but also a portion of the back payments owed.

Mortgage Modification

·· Benefit: Reduces the payment a homeowner is required to make on a monthly basis and may reduce the principal balance of the loan.

·· Drawback: Requires that a homeowner qualify for the new payment and will often require full documentation.

Rent the Property

·· Benefit: Allows homeowner to keep property indefinitely.

·· Drawback: The issues that can arise with a rental property are many, and rent often may not cover the full cost of property ownership and maintenance.

Deed in Lieu of Foreclosure

·· Benefit: Many times in a successful deed in lieu, the lender will forego their right to a deficiency judgment.

·· Drawback: Requires that a homeowner vacate the property, and a deed in lieu may be reported to credit bureaus as a foreclosure.


·· Benefit: Does not require lender approval.

·· Drawback: If a homeowner cannot afford their mortgage payment, a bankruptcy will only stall—not stop—the foreclosure process.


·· Benefit: In some cases, this will lower payments.

·· Drawback: In today’s market, refinancing will almost always raise mortgage payments and is an expensive process.

Servicemembers Civil Relief Act (military personnel only)

·· Benefit: If qualified, this will lower payments on all consumer debt in addition to mortgage payments.

·· Drawback: Must be active military to qualify.

Sell the Property

·· Benefit: Allows homeowner to avoid foreclosure and harvest some of their equity.

·· Drawback: In many cases today, homeowners do not have sufficient equity to sell their property without negotiating a short sale (see next solution).

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