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| AEC Solutions Provides The Best Default Aversion Programs In The Nation |
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Your Home and your Credit are your most important assets.
Now you can protect both in the face of adverse life events.
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DreamShield™
A home and credit retention program for those not currently experiencing a financial hardship but wish to protect against unanticipated future threats to their ability to meet monthly obligations.
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DreamRescue™
A Foreclosure Prevention program for those whose mortgage is currently delinquent or face an imminent hardship such as job loss or sudden increase in household expenses. |
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Life Events Shield™
Life Events Shield will provide up to 6 month of mortgage payments for up to 12 months if the borrower (or co-borrower) becomes involuntarily unemployed. For program details please click LES link.
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What are my choices when faced with loan default or foreclosure?
1. Repayment Plan
This option is used when the borrower the past due balance in a lump sum amount. It is available when the circumstances leading to the delinquency have been resolved. The borrower must provide an acceptable plan for bringing the loan current and generally requires a hardship letter explaining the reasons for default.
2. Forbearance
Forbearance is the temporary suspension of mortgage payments. This option may be utilized when temporary conditions such as illness, short term disability or unemployment render a borrower unable to pay.
No collection activities while the forbearance plan is in place.
Credit is usually NOT adversely effected when forbearance is put in place prior to any mortgage payment delinquency.
Payments resume once the borrower’s position returns to status quo.
Forbearance plans usually require extensive documentation because the inability to pay can be a very subjective situation. It is advisable to utilize the assistance of a certified loss mitigation specialist when pursuing the forbearance option.
3. Loan Modification
“Loss mitigation” and “Loan Modification” are often mistakenly thought to be two ways of saying the same thing. In reality, Loan Modification is only one of many workout options.
Loan modifications are designed to accommodate, either permanently or temporarily, a borrower’s diminished ability to pay.
The most common “Loan Modification” solutions consist of either extending the loan term or lowering the loan interest rate, or a combination of both.
The following are the most common requirements for a loan modification:
• Reason for hardship has been resolved
• Borrower has an ability to pay the modified payment going forward.
• Borrower is not in active bankruptcy
• The loan modification is documented in written form
4. Short Sale
In a short sale the mortgage lender agrees to take a payoff on the mortgage that is less than the amount that is owed. This allows the property to be sold at current market value. Disposing of property through a Short Sale has a much less damaging effect on credit than foreclosure.
5. Deed-In-Lieu
Under this option the borrower’s property is surrendered to the lender in lieu of foreclosure. Generally it’s a last resort option for a lender to authorize a Deed-In-Lieu since the lender does NOT want the property. Their financial costs escalate once the property reverts back to bank ownership. The property must be kept in good shape. Documentation is required that the homeowner cannot afford the payments and that there is a verifiable hardship. Deed-In Lieu is generally not available if there are additional liens on the property, such as a second mortgage.
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