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Progress made in saving homeowners from foreclosure

One of the biggest impacts of the most recent financial crisis was on the real estate market. Even though prospects for many distressed homeowners in South Carolina have increased significantly over the last several months, the recession's effect on home mortgages and foreclosure will still be seen for quite some time.

Certainly, an improving economy has helped a number of homeowners avert foreclosure and bring down the national foreclosure rate. Yet a few federal policies have served to benefit many homeowners on the verge of losing their home as the result of mortgage payments they can no longer afford.

In February of this year, the Home Affordable Foreclosure Alternatives program went into effect. This policy, affecting all mortgage lenders with the exception of Fannie Mae and Freddie Mac, opened up opportunities for homeowners to pursue a deed in lieu of foreclosure or a short sale. Lenders were resistant to either of these alternatives for quite some time, but the federal program now requires lenders to respond more quickly to homeowner's requests to avoid foreclosure.

Although both of the previously mentioned foreclosure alternatives provide similar results, they have different means for doing so. While homeowners sell their home at the market rate with a short sale, they simply hand over their home to a lender with a deed in lieu of foreclosure. This allows lenders to sell the property and troubled homeowners to walk away from their mortgage without facing many of the detrimental effects of foreclosure.

A deed in lieu of foreclosure is just one way to relieve the strain of an underwater home mortgage. As such, it may be beneficial to explore all available options and move forward with the strategy that best suits your needs.

Source: Consumer Affairs, "A fresh look at foreclosure prevention efforts," March 27, 2013

  • Our firm has helped South Carolina families find relief from an underwater mortgage. To learn more please see our Charleston foreclosure law page.

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Summerville, SC 29483
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Goose Creek, SC 29445
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