RICHMOND, VA (WWBT) - Home foreclosures are rising in Greater Richmond. They were up 50 percent this spring over last spring. One in 460 homes is receiving foreclosure notices. But there are some lesser known options to help homeowners avoid foreclosure.
When many people receive foreclosure notices, they panic and give up. But foreclosure counselors tell you the first step is not to panic and to communicate with your lender about any problems you're having paying your mortgage.
Paula Sherman at Housing Opportunities Made Equal of Virginia says the next step is to contact a counselor. "Contact a HUD approved counseling agency who can talk to them about their situation in more detail and help them develop a plan of action to help them avoid foreclosure," Sherman said.
That plan often involves loan modification. Explained Sherman, "Loan modification is when the mortgage company can change one or more of the terms of the loan. Usually it's the interest rate and the term of the loan."
There are other options, such as repayment plans to cover back payments, forbearance, which is a break from paying, usually up to three months. There's a partial advance claim, for those who qualify, where FHA can advance money to cover past due payments. Filing for bankruptcy may let you stay in the house.
And there's a deed in lieu. Said Sherman, "Deed in lieu is when the homeowner is able to deed the property back to the mortgage company to be relieved of the financial obligation."
Homeowners can also sell the house. It's often done through a short sale, usually for less than the home is worth, or through a foreclosure avoidance auction.
Motley's Auction and Realty Group says it holds foreclosure avoidance auctions by marketing the home through the internet, mailers, and open houses, and sometimes can sell it for more than a bank might get just auctioning it on the courthouse steps.
Said President and CEO Mark Motley, showing us a classified listing, "This is how a typical foreclosure is advertised in the newspaper, just a legal ad. One of the things a professional auction company can do is offer a more aggressive advertising campaign," showing us a color mailer.
Foreclosure avoidance auctions are held in person and over the internet to reach a wide audience. Said Motley, "Within 30 days we can have a sale. Within 30 days you will have a closing and the contract will be no contingencies. That's what the bank likes to hear."
You can contact Housing Opportunities Made Equal of Virginia for list of HUD approved foreclosure counselors at 354-0641.