Monday, May 21, 2012

Distressed Properties: Options for Distressed Seller

A distressed property, in real estate terminology, means that a property is under foreclosure and is up for sale by the mortgagee. Characteristics of distressed property are oftentimes having a negative impact on the fair market value of the property. It is being sold by land owner to avoid foreclosure and at the same time to try and cut the financial loses.

If you are one of the land owners with distressed property, know that you are not alone. It is a sad fact that facing foreclosure is an overwhelming experience, but there are several options for distressed sellers other than foreclosure. If you missed payments for temporary reasons that have been remedied, you have the option to reinstate the mortgage. Reinstatement is the easiest way to avoid foreclosure as it does not need the mortgagor or lender’s approval. You can simply ask the total amount, which includes missed payments, late fees and legal fees, owed to date and pay for it. Once the delinquent amount is paid in full, the mortgage is reinstated.

Another option to consider is forbearance or re-payment plan. The good thing with re-payment plan is it allows the owner to pay the delinquent amount over time; however, owner is required to submit a financial documentation proving that he will be able to comply with the terms of repayment plan. In forbearance, lender will add the missed payments on top of the regular loan amortization for a period of time, for example, 12 months. Once the owner completes the 12th payment, the mortgage will go back to its regular amount.

In the event that the land owner can’t qualify for the two options mentioned earlier, he has the option to sell his land via short sale. This process involves putting the land on the market and the owner must have financial hardship to qualify. In this case, financial hardship is no longer in question. It is just a matter of presenting the necessary documents as proofs of financial hardship. Short sale allows the owner to salvage his credit score and keep the foreclosure off his record. While short sale seems straightforward, it is a complicated process and needs the expertise of experienced professionals. To keep yourself free from stress over short sale, you can sell your land to Lucas Properties LLC. Lucas Properties provides cash for distressed properties minus the hassle of traditional selling process.

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