Banks are swamped by foreclosures. Foreclosures numbers are at all time highs for Homes for Sale in Odessa TX , to Real Estate in Redmond Washington . Some areas have so many foreclosures banks don’t want any more. They have even temporarily stopped all foreclosures. This is creating huge numbers of foreclosures and shadow inventory. Ideally banks don’t want foreclosures, and there are several options that can avoid them.

List Your Home for Sale.  Home owners who have equity, can simply sell their homes as a method to prevent foreclosure. But, in the current market, most distressed borrowers don’t have equity. Almost one in every four people with home loans have notes bigger than the value of their property. It is possible to sell underwater homes if you can get a short sale approved.

Renegotiate Loan Terms – With the encouragement of federal programs, many banks are willing to consider loan modifications.In some cases, the law might require fradulaent loans to modify terms.

Deed in Lieu of Foreclosure – A foreclosure alternative where the owner voluntarily gives the deed up to save the hassle of the foreclosure actually happening. It’s rare that Deeds in Lieu of Foreclosure actually happen. Most experts tell lenders to do short sales or deeds in lieu of foreclosures, but this doesn’t always get done because it is hard to find decision makers. Banks have a hard time deciding exactly what criteria they will take to accept a short sale because every home is unique.

Deeds in lieu of foreclosures have some other issues that can make them a big more complicated. With foreclosures, the junior liens get nothing and are wiped off the record. They get shafted. They lose their lien and their right to foreclose. It takes these debts off of the title. The banks do still have a right to judicially seek remedies for the unpaid debt. These banks still have a statutory right to go back on the borrower who owes the money. With deeds in lieu of foreclosures, when there are junior liens, the lender is responsible for these debts.

Forebearance — With a forebearance agreement the lender delays his right to exercise foreclosure to give the borrower a chance to catch up on their payments. The success rate for forebearances are pitifully low. Most people don’t even know that they have this option. It is wise to get advice from a non profit HUD approved housing organization to provide information on your foreclosure options. These services are free. It is illegal for people to charge for loan modification services unless they have a mortgage license. Make sure you watch out for scams when investigating your foreclosure alternatives.