Depending on your individual circumstances, you may be able to work out an alternative repayment option that can help you get out of default and back onto the path of financial security.
Before discussing with your bank on possible options, be prepared to have the following:
These are some of the repayment solutions available:
Repayment Plan
This option distributes your delinquent payments over a period of time, usually no more than 10 months. The monthly amount is added to the usual mortgage payment.
Key Benefits: Brings your account up-to-date within a specified time frame and with a goal in sight, you can move forward knowing that your home is secure.
Loan Modification
Adds any past-due interest and escrow amounts to the unpaid principal balance, which then becomes re-amortized over a new term.
Key Benefits: Changes the mortgage note itself, giving your a fresh start on managing your home asset and brings your account up-to-date immediately.
Partial Claim (only for FHA loans)
The Department of Housing and Urban Development (HUD) advances a loan to repay the past-due interest and escrow amounts.
Key Benefits: HUD loan is interest-free and brings your account up-to-date immediately.
Short Sale
Allows you to sell your home and use the proceeds to pay off the mortgage if you are unable to maintain payments, even if the home’s market value is less than the total amount owed.
Key Benefits: Avoids the lengthy legal process involved in foreclosure and generally is less damaging to your credit rating than foreclosure.
Deed-in-Lieu of Foreclosure
Allows you to transfer your property voluntarily to Wells Fargo if you are unable to maintain payments and cannot sell the home at market value.
Key Benefits: Avoids the lengthy legal process involved in foreclosure and may be less damaging to your credit rating than foreclosure.