Avoid Foreclosure in Hawaii
If you want avoid foreclosure in Hawaii, you have options. Do you owe more than what your house is worth in today’s market? Are you behind or about to be behind on your Mortgage Payments? You may qualify for a short sale.
With the Federal Reserve crushing the housing market, it’s more and more common for a Hawaii homeowner to to find themselves in a hardship situation. If you are a Hawaii homeowner and you are unable to make your mortgage payments, you have options that can help you avoid a foreclosure! The State of Hawaii has information that can help you, but it can be confusing. There is a big difference between a short sale and a foreclosure on your record.
A short sale might be an option because the homeowner owes $500,000 on their mortgage, but can only sell their house for $400,000 because of current market conditions. Since the homeowner must sell their home, and the homeowner does not have the ability to bring the difference of what they can sell the house for and what is owed, in this case $100,000, then this might be a good case for a short sale.
A Time Sensitive Real Estate Transaction
We arrange and facilitate the negotiating of your short sale with the best in the business! Keep in mind if the process isn’t handled 100% correct from the beginning you will run out of time and your home will go into foreclosure. This isn’t a normal real estate transaction where if the home doesn’t sell you can just re-list with another real estate agent. Once you stop making payments, the time clock begins. I tell you this so you know the importance of calling the right agent.
The benefit of a Short Sale over a Foreclosure
If you participate in a short sale, and the company you hire is successful in getting the bank to accept short of what is owed to them on your mortgage, your credit will only show 30-60-90 day late payments, contrary to an actual foreclosure on your record. If you foreclose on your home, you will not be able to get another mortgage for as long as seven years. If you manage to do a short sale, you may be able to get another home mortgage within a couple years or less.
This requires your lender to take a discount on what is owed them. Sometimes your lender will take as much as 20% or more less than what is owed. If you have a FHA mortgage, your lender will send out an appraiser and can accept approximately 82% less than the appraised value.
Why the Forbearance Program is Changing the Housing Market
When the pandemic hit in 2020, many real estate experts thought the real estate market would crash. Experts thought job loss and economic uncertainty would lead to a wave of foreclosures similar to what happened in 2008. When the housing bubble burst over a decade ago. Thankfully, the forbearance program changed that. It provided relief for homeowners so a foreclosure crisis wouldn’t happen again.
Here’s why forbearance worked
Forbearance enabled nearly five million homeowners to get back on their feet in a time when having the security and protection of a home was more important than ever. Those in need were able to work with their banks and lenders to stay in their homes rather than go into foreclosure. Marina Walsh, Vice President of Industry Analysis at the Mortgage Bankers Association (MBA), said:
“Most borrowers exiting forbearance are moving into either a loan modification, payment deferral, or a combination of the two workout options.”
What does this mean for the housing market?
Many homeowners can stay in their homes and work out alternative options. Forbearance wasn’t the only game changer, either. Lending standards have improved significantly since the housing bubble burst, and that’s one more thing keeping foreclosure filings low. Today’s borrowers are much more qualified to pay their home loans.
And while the majority of Hawaii homeowners are exiting the forbearance program with a plan, for those who still need to make a change due to financial hardship or other challenges, today’s record-level of equity is giving them the opportunity to sell their houses and avoid foreclosure altogether. Homeowners have options they just didn’t have in the housing crisis when so many people owed more on their mortgages than their homes were worth. Thanks to their equity and the current undersupply of homes on the market, homeowners can sell their houses, make a move, and not have to go through the foreclosure process that led to the housing market crash in 2008.
It is essential to understand the unique housing market here in Hawaii. For assistance from an expert, please reach out to us so we can connect you to a Certified Distressed Property Expert who has specialized training to guide you through the complex programs and options that you have available to you.
