The majority of homeowners who are facing mortgage loan foreclosure have a financial hardship and can no longer afford their monthly mortgage payments. Some have lost their jobs, or have had had their wages reduced because of the economy. As a result, they are in default or about to default on their mortgage. Also, for many homeowners, the value of their homes has gone down. Therefore they have little or no equity in their property. There is help available for homeowners that want to prevent mortgage loan foreclosure. The best advice is to contact your lender right away, and let them know about your financial situation. Lenders want to help you. The government has been pressuring lenders to find solutions to prevent foreclosure by instituting voluntary foreclosure prevention programs and offering incentives to lenders and borrowers. The following are options that homeowners are using to save their homes from foreclosure:
- Mortgage modification. You may qualify under the government’s HAMP program. If you are unemployed, you may also be eligible under the HAMP program for forbearance.
- Refinance. If you have equity and you have a variable interest rate mortgage, you may want to refinance to a fixed rate mortgage with a lower interest rate.
- Reinstatement. Bringing your payments current.
- Forbearance. The lender reduces the principal and/or extends the arrearage payments over a short period of time.
- Deed in lieu of foreclosure. Signing deed over to the lender and returning the home in exchange for not having to pay your mortgage balance.
- Short Sale. Selling your home for less than you owe on your mortgage with your lender’ s approval, and walking away owing nothing to your lender. You may be eligible for the government’s HAFA program if you have been turned down for a loan modification under the government’s HAMP program.
- Selling your home. If you have equity, selling your home and paying off the mortgage balance.
- Bankruptcy as a very last report. Filing for Chapter 7 or Chapter 13 allows you to keep your home and your car, as long as the value meets the statutory exemptions.
Where to Get Help?
A certified HUD housing counselor or a foreclosure defense attorney can help you determine which option is the best for you. While facing a foreclosure on your home seems overwhelming, you should not ignore the situation. Lenders are willing to find a solution that works for both of you. You should educate yourself, and be proactive in trying to save your home from foreclosure.
An Attorney Can Assist You
Foreclosure issues are complex. It is recommended that you obtain assistance from a foreclosure defense attorney. The foreclosure defense attorney can defend you in a foreclosure action, and help you save your home from foreclosure.
