Foreclosure can be overwhelming and stressful. Homeowners don’t know where to turn. The dilemma for many people has been (1) whether to stop my foreclosure with a mortgage modification, refinance or reinstatement; or (2) whether to sell my home with a short sale, return it to my lender with a deed in lieu, or even file for bankruptcy. There is help available for homeowners who want to avoid foreclosure. Lenders are sympathetic. They would rather work out a solution so that you can avoid foreclosure, and keep your home. Foreclosures are expensive and time consuming for all parties. Since the right foreclosure prevention option can be complicated, you should consult with an attorney.
Factors to Consider
When you are considering foreclosure prevention options, you should take into account the following factors:
- Your income
- Total amount of debt besides your mortgage
- How much equity you have in your home
- Total amount of other assets
- Are you are upside down on your mortgage because your home has declined in value, and you owe more on your mortgage than it is worth in today’s market?
- Nature of your financial hardship and whether it is short term or long term.
You and your attorney can then realistically review your situation, and find a solution for you to avoid foreclosure. It’s also important to speak to your lender right away once you realize that you cannot afford your mortgage payments and are about to default. Lenders have been receiving a lot of pressure from the government to find alternatives to foreclosure so they are willing to work with you.
Government Prevention Program Options
The following are government foreclosure prevention programs that offer options for homeowners:
- HAMP. Eligible borrowers may be able to obtain a mortgage modification or forbearance if you are unemployed.
- HAFA. Eligible borrowers may be able to obtain a short sale or deed in lieu if they have been turned down by their lender for a mortgage modification under HAMP.
- FHA-HAMP. Eligible borrowers with an FHA mortgage may be able to obtain a mortgage modification.
- VA. Other programs are available, and you should check with your lender.
Obtain Help from a Foreclosure Defense Attorney
Foreclosure options are confusing to most homeowners facing foreclosure. A foreclosure defense attorney will be able to advise you of the best option for your situation. The attorney can defend in you in a foreclosure action, and negotiate with your lender to find a solution to save your home from foreclosure.
