Jim Waugh, CRS



Caution: There’s no strategy in ruining your credit

Walking away from your mortgage can be incredibly dangerous

when considering your financial future.

In a “strategic default,” homeowners simply choose to walk

away from their mortgages—in other words, move out and

stop paying. This is often done when a homeowner owes more

on the home than it’s worth or is “underwater.” Most of these

homeowners do not understand that walking away will expose

them to foreclosure, which carries credit issues, current and

future employment challenges, issues with security clearance,

and possible debt collections.

Due to current economic conditions, one in four American

homeowners have found themselves underwater on their

mortgages, and millions can no longer afford to make their


Fortunately, you have options to avoid foreclosure and protect

your financial future.

Solutions for Financial Stability

Short Sale

Generally considered one of the most viable alternatives to

foreclosure, short sales allow homeowners to minimize financial

damage and move on from a burdensome, unaffordable

mortgage. In many cases, short sales allow borrowers to qualify

for a new mortgage in as little as two years, as opposed to five

years or more after a foreclosure.

Demystifying Short Sales

There are many myths about how short sales work, including

the rumors that they have the same affect on your credit as

foreclosure and are impossible to complete. I can show you

how that’s just not true, and how securing a loan for a home

in the future is much quicker after a short sale rather than a

foreclosure. New bank and government short sale programs

have also made the short sale process a more streamlined,

efficient process for all parties to the transaction.

Benefits of Short Sales

• Avoid foreclosure at no cost to you

• Lesser impact on credit scores

• Security clearance protection

• No challenges to future employment

• Retain some control over the sale of your property

(vs. public auction)

• The ability to negotiate away a deficiency judgment

(collection of your mortgage debt)

• Shorter waiting periods to get another mortgage

Other Alternatives to Foreclosure


A reinstatement is the simplest solution for a foreclosure, but

often the most difficult to achieve. The homeowner simply pays

the total amount past due (including late fees) to the lender.

Mortgage Modification

A mortgage modification involves the reduction of one of the

following: the interest rate on the loan, the principal balance of

the loan, the term of the loan, or any combination of these.


Also known as a “friendly foreclosure,” a deed-in-lieu allows

the homeowner to return the property to the lender rather

than go through the foreclosure process.


A forbearance or repayment plan involves the homeowner

negotiating with the mortgage company to allow them to

repay back-payments over a period of time.

Rent the Property

This option does not require lender approval, but does require

the homeowner’s ability to rent the house for enough money

to cover the monthly mortgage payment.

Servicemembers Civil Relief Act

If a member of the military experiences financial distress

due to deployment—and their debt was entered into prior

to deployment—he or she may qualify for relief under the

Servicemembers Civil Relief Act.


Many believe bankruptcy is a “foreclosure solution,” but

this is only true in some states and situations. Entering

bankruptcy can be a risky and costly process. Be sure to seek

the advice of a qualified bankruptcy attorney when pursuing

this as an option.


Refinancing means you will acquire a new loan based on your

current credit standing. If you have already missed mortgage

payments, your credit score may make it difficult to find a

loan with cheaper payments.

Knowing that foreclosure can be avoided gives you the ability

to develop a realistic strategy to plan for a future that is both

financially stable and full of hope.

The Government and Lenders Want to Help

Since the beginning of the mortgage crisis, millions of

Americans have faced mortgage challenges. For the last four

years, lenders have faced an equally daunting challenge of a

managing the sheer number of borrowers who weren’t able

to pay their mortgages. Lenders are not in the business of

owning real estate, and are motivated to find solutions that

would benefit all parties involved. In a short sale, even though

lenders lose a part of their investment, they recover more

funds than in a foreclosure. Homeowners are also able to

keep foreclosure off their credit reports.

Today, lenders are becoming increasingly equipped to

streamline the short sale process, and have developed new

processes to help facilitate this foreclosure solution.

In addition, the government’s Home Affordable Foreclosure

Alternatives (HAFA) program offers cash incentives to lenders

and homeowners to successfully complete a short sale or


The program requires the waiver of a deficiency

judgment, meaning the lender must forgo its right to pursue

any losses they incur from the short sale.

Give the Green Light to Financial Stability

When you have options to avoid foreclosure, you will soon

realize that there’s nothing strategic about “strategic default,”

or walking away. I can help you form a real strategy based

on your circumstances, and help put you back on the road to

financial stability. The sooner you call me, the more time we’ll

have to act and move toward a more promising future.

/Photos/120x/14003.jpg Jim Waugh, CRS
Office: 303-980-7825
Direct: 303-888-7481
Cell: 303-888-7481
Fax: 303-987-3463
8500 W. Bowles Ave.#100
Littleton, CO 80123

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