Plenty of options exist to help homeowners avoid foreclosure and get back on track financially.

Bonny Puckett, a Fountain Hills licensed real estate agent specializing in foreclosure processes, educates homeowners about the foreclosure process and how to prevent foreclosures.

Puckett of Call Realty maintains her Web site at www.azforeclosureprevention.com.

Puckett suggests the foreclosure process can be stopped by the following options:

• Reinstatement. The lender should be contacted to learn requirements for reinstating a loan. Typically it will mean paying a lump sum of all payments in arrears, any late fees, and possibly additional fees incurred by the lender in starting the foreclosure process.

• Restructure payments. If the lender is willing, a plan can be compiled to restructure payments. Terms of the original loan agreement may be readjusted by reducing interest rates, re-amortizing the remaining balance of the loan, or extending the loan term.

• Forbearance. Deferring mortgage payments for a brief period might allow a homeowner to catch up with payments. During forbearance, interest will continue to accrue on the total amount of the loan, the loan term may be extended to account for the forbearance period, and the lender may charge additional fees.  

• Equity loan/line of credit. If less is owed on the home than the current market value, an individual may be able to use a home equity loan or line of credit to cash out equity from the home and provide money to catch up on payments. This option should only be used in short-term hardship situations because it increases an individual’s debt and monthly payments.

•Refinance. Refinancing may allow a person to wrap together the remaining balance of the loan, plus any additional fees that have been accrued into one monthly payment. 

• Reverse mortgage. If the homeowner is over the age of 62 and has built significant equity in the home, a reverse mortgage may be an option to supplement income. A reverse mortgage allows a person to pull equity from the home on a monthly basis.

• Sell the home. This may be the best alternative because it allows a person to salvage their credit, pay off the loan and hold on to the equity that has built in the property. A lender may be willing to postpone the foreclosure sale to allow sufficient time for the sale of the property to close.

• Lease options. An arrangement may be worked out where ownership is conveyed to an investor who would lease the home back to an individual for a specified period. At the end of the time, the home would be purchased back from the investor.

• Deed in lieu of foreclosure. This method of voluntarily giving up ownership and conveying title to the lender is a final effort. In exchange, the lender would release the borrower from any financial responsibility.

Puckett offers a free consultation to determine which option may work best for you. Call her at (480) 205-6324.