Boise homeowners finding alternatives to just letting the bank foreclose

Boise, Idaho – Short Sales, Foreclosure, and Loan Modification News

For the growing number of Boise, Idaho homeowners faced with figuring out their best option for avoiding foreclosure, the pros and cons may not always be clear. According to RealtyTrac, a foreclosure tracking website, 1 in every 229 Boise area homes received some for of foreclosure filing in December.

In many instances, Boise homeowners are faced with a situation where they have little or no equity. Homeowners find themselves in the difficult position of deciding if they should try to modify their loan, short sale their home, or just let it go to foreclosure.

For most cases, Boise homeowners have much better alternative than just letting the lender foreclose.

In foreclosure, a Boise homeowner has little if any control of the final outcome. They can end up with serious damage to their credit, and possibly a judgment against them for the deficiency.

In Idaho once the homeowner is 90 days late on their mortgage, a notice of default can be filed to start the foreclosure process. The lender can pursue their rights against the property and sell the property at a foreclosure auction 120 days after the notice of default has been recorded to satisfy the debt.

The difference between what is owed and on the loan and what the property sells for is called a deficiency. The lender can pursue a Boise homeowner in court to recover the amount of this deficiency.

The negative impact of a foreclosure on your credit score will prevent most people from being able to purchase another home for five to seven years. The damage to your credit score may also affect other personal lines of credit as well. By some estimates, a foreclosure on a Boise home will lower the owner’s credit score by approximately 250 points and can remain as a public record on personal credit history for 10 years.

It’s not hard to see; that many of the alternatives available to Boise homeowners are far better options than foreclosure.

If keeping your Boise home is the goal, then a loan modification is the best place to start. Mortgage lenders have been reluctant to help Boise homeowners, even with the incentives being offered through Government programs. Persistence has paid off for some Boise homeowners allowing them to receive permanent loan modifications. Keep in mind many financial advisers have cautioned against this option, if you owe considerably more than the home is worth.

Short sales are an excellent option in cases where Boise homeowners can no longer afford their payments or the value of their home has seriously declined. This gives a Boise homeowner more control over the settlement of the debt with their lender. In many instances the lender may agree to allow the homeowner to walk away from the home without owing anything.

In the case where a lender may ask for a seller contribution or promissory note, the homeowner has the option of negotiating agreeable terms. The impact to a Boise homeowner’s credit is less severe than a foreclosure and you can avoid the cost of possibly having to defend your case in court. This has proven to be the best alternative, in most cases, for the homeowner and lender.

If the homeowner isn’t able to complete a short sale or loan modification, as a last alternative the lender may allow a Boise homeowner to hand over the deed to the bank in lieu of foreclosure. This option is worse for the homeowner’s credit than a short sale; however, it is still better than foreclosure. A homeowner will still have some say in negotiating the final settlement terms with their lender.

The best thing to do before pursuing any of these options is to work closely with a real estate professional that specializes in this kind of work and contact your lender early on so you’ll have as much time as possible to resolve your situation.