If You Can Avoid a Foreclosure, The SC Supreme Court Says It’s The Way to Go

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With a plethora of distressed homeowners these days it is no wonder that the Supreme Court addressed the situation, resulting in an administrative order requiring banks and lenders to present at least two alternative options to foreclosures.  Given that there are so many pending foreclosures lurking in the court system at the present time, the dockets are clogged literally, with little to no room for more cases.  Not only do foreclosures mean bad things for the homeowners but they are also a major loss to lending institutions, so this new moratorium poses positive change for all sides on the issue.

Why Foregoing a Foreclosure Is a Good Idea

CONSUMERS

The number one reason that consumers benefit from not foreclosing on their homes is that it protects their credit.  The damage done to the credit worthiness of a family that has undergone foreclosure proceedings is insurmountable.  It takes 7 to 8 years to drop off the record but the impact lasts for much longer.

Aside from credit salvation, homeowners that have to endure losing their homes to the bank usually end up going through a painful and emotional process that goes with the territory of having to lose their family home.  The process creates a vicious cycle of depression for many consumers in this situation, who have suffered loss after being unable to maintain the mortgage payments.

Loan modifications and short sales offer comfort to families and the safety net of being able to stay in their own residence, suffering far less damage to their credit profile while at the same time being spared the emotional impact and negative ramifications of having lost a home.

LENDERS

Banks and lending institutions also greatly benefit from foregoing on foreclosures.  The single biggest benefit made available to lending institutions who are able to accommodate loan modifications or short sales is that the amount time, money, energy and resources saved from not having to go through the foreclosure litigation process.

Another reason banks prefer to avoid foreclosures is that the property remains in much better condition when it is managed through a short sale or loan modification.  At the end of the day, this impacts the value of the property and of surrounding areas as well.

Supreme Court Intervention Is a Welcome Concept 

Now that banks are required to offer the foreclosure intervention program to all primary residential foreclosures that are pending or in default as of May 9, 2011 – this will not only clear court dockets and allow the bottleneck in courts to subside, but it will also serve to protect people from losing their homes unnecessarily.  In lieu of more traditional methods, consumers will now have more reasonable alternatives and additional options to choose from when faced with the difficult decision to deal with their inability to manage their mortgage.

What Hoffman Group is Doing To Help

Since a flood of intervention program candidates will be expected, the Hoffman Group has set up a team dedicated primarily to assisting homeowners with their short sale needs.  In what was once a bumpy ride, the short sale procedure has now been smoothed out enough to be relatively seamless and easy enough to get through for homeowners needing to avail this solution.

The team assembled by the group will be assigning an attorney with our lending partners to go out and learn exactly what is entailed in each situation, so that we are in a better position to understand our clients’ needs.  To assist our clients’ who need to go through this, we will help them in any way we can to make the process as smooth as possible.

Bob Whetstone, of the Hoffman Group, reports a staggering 62% increase in short sales from Q1 2010 to this year.  Given the new Supreme Court decision, our experience and teamwork will be paramount in assisting our clients in their short sale endeavors in the coming months and year.

For more information on the Supreme Court decision of May 2, 2011 click here.