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Solutions for Homeowners Facing Layoffs in 2024—How We Can Help

A group of worried individuals standing outside their homes with moving boxes, symbolizing massive layoffs and impending homelessness.

By Freddie Avila

Introduction to Homeowner Assistance

In recent months, there have been thousands of layoffs across the country. Tesla, the tech world, and at least nine retail brands have announced they’re closing US stores in 2024, totaling some 1,280 locations. In the wake of these developments, navigating financial challenges has become a pressing concern for many homeowners across the country. In this guide, we’ll explore the various options available to homeowners facing financial hardship, from forbearance and loan reconstruction to alternative income sources and housing alternatives.

Understanding Forbearance and Loan Modification

When homeowners face financial difficulties, they often turn to their lender for help, seeking options like forbearance or loan modification to adjust loan terms. However, it’s important to realize that lenders may prioritize their own interests over the borrower’s. Motivated by profit, they might offer limited assistance or push solutions that benefit them more. This lack of transparency can leave borrowers unaware of better alternatives. Consulting financial advisors and exploring options beyond direct lender assistance can help ensure informed decisions that truly serve the borrower’s best interests.

Starting with Forebearance: Leveraging Lender Support in Financial Struggle

  • Forbearance: This option allows homeowners to temporarily suspend or reduce their mortgage payments for a specified period, providing short-term relief for those facing financial hardship.
  • Loan Modification: Unlike forbearance, which is temporary, a loan modification involves permanent changes to the terms of the loan. This could include reducing the interest rate, extending the loan term, or even forgiving a portion of the principal balance.

Note: I’m not a fan of loan modifications because they can extend your existing loans by many years. Plus, if you’re in the middle of a loan modification, “it won’t stop your foreclosure auction date.”

Financial Assessment and Expense Management

Before contacting your lender, it’s crucial to conduct a thorough assessment of your finances. Consider the following steps:

  • Review Your Expenses: Identify areas where you can cut back, such as subscriptions, memberships, or other discretionary spending.
  • Explore Additional Income Sources: Look for ways to increase your income, such as renting out unused space or considering an Accessory Dwelling Unit (ADU) on your property before defaulting on your mortgage. You can live in the ADU and rent out your home until you’re back on your feet.
  • Evaluate Assets: Consider selling or liquidating assets like luxury vehicles, boats, or unused leased vehicles to free up cash.

Zero-interest Credit Cards

You can also consolidate your credit cards into zero-interest credit cards with an 18-month or longer introductory period to avoid damaging your credit score.

Reaching Out

Do you have friends, family, or co-workers who owe you money? Do you have extra rooms that you can rent out, perhaps to traveling RNs or others with secure careers?

Alternative Financial Solutions

While tapping into retirement savings or investments should be a last resort, it’s essential to understand the implications:

  • 401(k) or RIA: Withdrawing funds prematurely from your 401(k) or Registered Investment Advisor (RIA) before retirement age can incur taxes, penalties, and jeopardize your future financial security.
  • Caution with 401(k) and RIA: Consider as a last resort when facing job loss and foreclosure.
  • Tax Implications: Early withdrawal incurs taxes and penalties, including income tax and early withdrawal fees.
  • Long-Term Impact: Reduces retirement savings, jeopardizing future financial security.
  • Potential Loss of Future Income: Sacrifices future retirement income, especially detrimental during market downturns.

Alternative Options: Explore unemployment benefits, loan forbearance, government assistance, or additional income sources first.

Financial Advisor Consultation: Seek guidance before deciding, to understand implications and explore personalized alternatives.

Seeking Professional Guidance

Before making significant financial decisions, consult with a financial advisor to assess the implications and explore alternative solutions.

Preventing Foreclosure

(if you’re in immediate danger of foreclosure, please contact me and I will do my best to pause the auction sale).

If you’re at risk of foreclosure, consider the following steps:

  • Contact Your Mortgage Servicer: Explain your situation and explore loss mitigation options available to you.
  • HUD Counseling: Reach out to a HUD-approved housing counseling agency for guidance on available options and assistance with budgeting and financial planning.

Additional Resources:

  • NeighborWorks America: Provides foreclosure prevention counseling and assistance. Find help near you: NeighborWorks America.
  • Legal Aid Services: Offers free or low-cost legal assistance for homeowners facing foreclosure. Search for services: Legal Services Corporation or LawHelp.org.
  • State Housing Finance Agencies: Provides foreclosure prevention programs and resources. Find your state’s agency: HUD State HFA Contacts.
  • Homeownership Preservation Foundation (HPF): Offers free counseling and assistance. Contact HPF: Homeownership Preservation Foundation.
  • Local Community Development Corporations (CDCs): Provides housing counseling and

Assistance and Services by House Debt Relief

If homeowners have exhausted their options and require further assistance, I offer various services to support them, including wraparound mortgages, deed in lieu arrangements, reverse mortgages, short sales, subject-to agreements, seller financing, and cash offers. It is recommended to consult with me for more information on these services.

Learn more (Default Relief)

Thank you for taking the time to read this guide. If you have any questions regarding my services or need assistance, please feel free to reach out to me online or by direct message.

Freddie Avila

General Advice and Support for Homeowners Facing Foreclosure

At House Debt Relief, we provide general advice and support for homeowners facing foreclosure, tailored to your unique financial situation. Our primary goal is to offer guidance that aligns with your best interests.

We recommend exploring assistance through non-profit, city, and state resources first. If these resources cannot provide the help you need, please reach out to us for further assistance or to request our advice at any time.

House Debt Relief is here to support you.

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DISCLAIMER

Every situation is different, and depending on several factors, we will determine the best result. We cannot make any guarantees that your property will be saved. Time is of the essence, and depending on your financial situation, at times, the home may need to be sold. Additionally, we may have the ability to make a cash offer and provide assistance with moving costs, but all cases vary.

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