Avoiding Foreclosure

If
you need foreclosure help, taking an active role early plays a major role in
avoiding foreclosure. We’ll show you a few potential ways to stop foreclosure
before it’s too late.

Homeowners who have
trouble making mortgage payments in a timely manner may be subject to seizure
and the loss of title of their home. For these often well-intentioned
individuals, unforeseen circumstances

such as job insecurity
or medical issues have them facing the unfathomable—home foreclosure.

Regardless of the
circumstances, it should and can often be avoided, with a little effort.

If you’re unable to make
your mortgage payment, it’s absolutely critical that you call your lender now,
in order to stop foreclosure. Ignoring the bills will only make matters worse,
increasing the likelihood that you’ll lose your home for sure. Borrowers who
seek foreclosure help early are much more likely to work out a solution, no
matter how dire their situation. Mortgage companies want to avoid foreclosure
as much as you; they’re much more interested in the money they make off your
interest, rather than the money they’ll lose on your home foreclosure. Based on
your situation, your lender may be able to provide the foreclosure help that
you need.

Problems making your
mortgage payment?

Here are a few options
for individuals who can’t make their mortgage payments or may have short-term financial
problems and want to avoid foreclosure:

Forbearance

A temporary agreement
that delays payments for a short period of time. Mortgage lenders will only
allow forbearance if you can prove you’ll eventually acquire funds. Some common
examples would be a tax refund or a bonus where you can show future earnings
that can bring your mortgage up-to-date.

Reinstatement

If you’re behind on your
mortgage payments, a reinstatement can take place when you make a lump sum
payment by a specified date, bringing your account back to current status.
Lenders often combine reinstatement with forbearance.

Repayment Plan

If you’re behind on your
payments, the mortgage company may give you a fixed amount of time to catch up,
by combining a portion of your past due amounts with your regular payments,
allowing you to get current.

Loan Modification

The terms of your loan
can be adjusted. Changing the amortization table or lowering your interest rate
can make a big difference, reducing your monthly payment amount to something
you can afford.

Federal Foreclosure Help

In response to the
recent mortgage crisis, the president has announced a refinancing program
called FHASecure. This new product offered through the Federal Housing
Administration (FHA) is estimated to help some 240,000 homeowners prevent
foreclosure. This is rather notable, as the FHA’s previous policy would not
allow for refinancing of borrowers in default. It does, however, come with
restrictions; you must meet the following criteria to qualify:

1)   You must
have a history of on-time mortgage payments and a decent credit history to
qualify.

2)   Your
interest rates must have or will reset between June 2005 and December 2009.

3)   You must
have 3 percent cash or equity in your home.

4)   You must
have a sustained history of employment.

5)   You must
have sufficient income to make your mortgage payments.

 The primary purpose of
FHASecure is to provide help to the well-meaning borrowers who may have been
lured into costly loans featuring teaser rates, and may be facing mortgage
foreclosure. You can find more information on the FHASecure plan at http://www.fha.gov

Severe Problems?

A few options for
individuals dealing with severe financial circumstances or can no longer afford
their mortgage payments and want to stop home foreclosure:

Short Sale

A deal between the
homeowner and lender to sell the property for less than it’s worth, with the mortgage
lender taking the loss.

Pre-foreclosure sale

A pre foreclosure sale
is an effective way of stopping foreclosure, allowing a default homeowner to satisfy
his mortgage obligation by selling the property in question for an amount less
than owed. You may qualify if:

1)   The loan
is at least 2 months delinquent,

2)   You are
able to sell your house within 3 to 5 months, based on what your lender agrees upon;

3)   A new
(lender obtained) appraisal meets HUD value requirements.

Deed-in-lieu of
foreclosure

This last resort allows
you to “give back” your property to the lender. This will leave a
mark on your credit record, but it will stop foreclosure, which is much more
severe.

Credit Counseling

A non-profit credit counseling agency may be able to help you prevent a real estate foreclosure. Be especially leery
of fee-based groups approaching you with bank foreclosure solutions. They’ll
often recommend (at a cost)
what we’ve covered above, most of which you can do on your own or with the assistance
of a HUD-approved counseling agency. You may find a HUD-approved housing
counselor online
or by calling (800) 569-4287 or TDD (800) 877-8339.

Taking a pro-active
approach to home foreclosure avoidance can’t be stressed enough. If you lose
your home to foreclosure, the lender may come after you to recover money owed
that may not have been recuperated in the property foreclosure sale.

If you need more information on how to avoid
foreclosure give us a call at (909) 278-7008