Listed below with brief explanations are the most common permanent legal procedures GoodSamaritansInc.com uses to prevent or stop foreclosure proceedings.

1. Loan Workout - A loan workout is when you negotiate with your lender a plan that benefits both you and the lender. This can be used for home owners are either delinquent or in default of their loan. This is a broad term used in the loan or mortgage industry covering many different options available to homeowners such as: loan modification, repayment plan, short sale, forbearance plan etc.



2. Loan Modification - This is when the lender modifies your current mortgage in order to work with you and make your mortgage more affordable. In the past this was only used when a borrower was delinquent but now it is being used before someone is delinquent. This will be the hottest term and way to help people avoid foreclosure.

3. Forbearance - This is used most of the time, when a Notice of Default has been filed. You are allowed to delay or reduce payments for a short period, with the understanding that another option will be used at the close of that time to bring your account to a current status. Your lender, if in agreement, will then temporarily cease legal actions.

4. Short Sale - This is used when all negotiations for a loan workout have failed and you are upside down on your mortgage meaning you owe more than it's worth. The lender basically agrees to cooperate in the sale and take a loss. You place the home for sale and any offers are presented to the bank. Unlike a traditional sale when the homeowner decides what offer to take. The bank controls the negotiations and the homeowner has no say in the process. It's a last ditch effort to save someone's credit from a foreclosure filing.

5. Foreclosure Bail Out Loan - Is a new loan where the defaulted mortgage is paid off. This is usually a hard money mortgage and it is common for interest rates to approach 10-15%. Points can be as high as 5 and terms are usually short. In the 5 year range where a balloon payment will be due for the remaining balance. In order to qualify you must have sufficient equity. Hard money lenders are looking for 65-75% max loan to value and a decent equity cushion. You also have to have ability to repay as in a traditional mortgage.

6. Deed-in-lieu - is a deed instrument in which a mortgagor (i.e., the borrower) conveys all interest in a real property to the mortgagee (i.e., the lender) to satisfy a loan that is in default and avoid foreclosure proceedings. The deed in lieu of foreclosure offers several advantages to both the borrower and the lender. The principal advantage to the borrower is that it immediately releases him from most or all of the personal indebtedness associated with the defaulted loan. The borrower also avoids the public notoriety of a foreclosure proceeding and may receive more generous terms than he would in a formal foreclosure. Advantages to a lender include a reduction in the time and cost of a repossession, and additional advantages if the borrower subsequently files for bankruptcy.In order to be considered a deed in lieu of foreclosure, the indebtedness must be secured by the real estate being transferred. Both sides must enter into the transaction voluntarily and in good faith. The settlement agreement must have total consideration that is at least equal to the fair market value of the property being conveyed. Generally, the lender will not proceed with a deed in lieu of foreclosure if the current fair market value of the property exceeds the outstanding indebtedness of the borrower. Because of the requirement that the instrument be voluntary, lenders will often not act upon a deed in lieu of foreclosure unless they receive a written offer of such a conveyance from the borrower that specifically states that the offer to enter into negotiations is being made voluntarily. This will enact the parol evidence rule and protect the lender from a possible subsequent claim that the lender acted in bad faith or pressured the borrower into the settlement. Both sides may then proceed with settlement negotiations. Neither the borrower nor the lender is obliged to proceed with the deed in lieu of foreclosure until a final agreement is reached.

7. Chapter 13 Bankruptcy - Is a protection plan primarily used to stop the foreclosure of your home. In order to qualify the home owner must prove that there is a sufficient steady income. The bankruptcy petition has to be filed with the court before the sale date of the property. The filing includes a proposed repayment schedule for the amount of arrears (past due) on the mortgage. Upon approval by your mortgage company and a subsequent court ruling the homeowner is once again returned to payment of the mortgage. Many lawyers and consumers/homeowners are unaware of the advantage of a Chapter 13 Bankruptcy over a Forced Loan Modification because of its lack of widespread use previous to our current economic situation where tens of thousands of American homeowners have defaulted in their mortgage. The primary advantage of a Chapter 13 Bankruptcy plan over a forced loan modification is that the forced loan modification can be sanctioned by the court if it is proved that the borrower cannot afford the current payments. The concept is similar to that of debt consolidation, but it permits you, the consumer/homeowner, to pay unsecured debt down without accruing interest, student loans are the only exception. Chapter 13 Bankruptcy halts all calls from debt collectors. Under a typical Chapter 13 Bankruptcy plan, the homeowner makes monthly payments to a court appointed bankruptcy trustee for a period of three to five years generally. The amount of the monthly payment is determined by several factors which usually include the amount of debt you have, your ability to repay and the extent of your assets. In exchange for stopping any and all collection activity, foreclosure and loss of the home, the homeowner proposes to pay all or, in specific circumstances, a portion of the debt through the Chapter 13 plan. The filing of a Chapter 13 Bankruptcy stops all collection activity though an order called the “automatic stay”. The automatic stay remains in effect during the life of the case unless the court has ordered otherwise. During or Post Chapter 13 Bankruptcy the homeowner can always apply for home refinancing or sell the home to pay off the bankruptcy, move, or just move on. Chapter 13 Bankruptcy stops a foreclosure immediately. Historically the only other options homeowners had was to refinance, or enter into a repayment agreement with the mortgage company which often required double or multiple payments made each month until the mortgage is brought to current status. The reason this nearly never occurred was because very few people had that kind of disposable income available to them and if they did they most likely wouldn’t have been involved in a situation that led to the need for Chapter 13 Bankruptcy protection.

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