Millions of homeowners are facing foreclosure and are not sure which is the best option for them to pursue to try and save their homes. Loan forbearance is an option that homeowners who have a temporary financial hardship should look into immediately. Loan forbearance is when the lender agrees to a payment plan to let you catch up on your mortgage arrearages. The plan usually is for a three to six month period. Your loan rate stays the same. If you think your finances will improve soon, then this your best option.
Other Options
There are other options that may work for you if you believe loan forbearance is not the answer. Mortgage modification, refinance, short sale, deed in lieu, selling your home are some of the most popular options that homeowners are choosing right now to get them out of their mortgage default situation.
Unemployed Homeowners
Unemployed homeowners who are collecting unemployment benefits may qualify under the expansion program of the government’s HAMP program. The government is requiring that lenders who are participating in HAMP agree to suspend or reduce the mortgage payments of unemployed workers for at least 3 to 6 months. If they become employed, and the current mortgage payment is 31% more than their gross income for the month, the lender/loan servicer must offer the borrower a modification under HAMP or a short sale under HAFA. The government also requires that the mortgage lender or loan servicer reduce the principal balance. This should help upside down borrowers regain some equity, and prevent more homes from going to foreclosure.
How to Decide Which Option to Choose?
Talk to a professional such as a certified HUD home counselor or a foreclosure defense attorney to help you decide which option is the best for your financial situation. Foreclosure prevention is confusing and requires the knowledge of someone who deals with these mattes on a daily basis. The most important thing to remember is to choose the best option that allows you to afford your mortgage payment. If you cannot afford the payment, then you may have to sell your home or give it back to the bank. Other homeowners are in the same position as you are so don’t feel ashamed to ask for help. Doing nothing is not going to solve anything. You should be proactive in finding a solution to your situation.
A Foreclosure Defense Attorney Can Help
A foreclosure defense attorney specializes in helping homeowners save their homes from foreclosure. They are familiar with loan forbearance and other foreclosure prevention options. The foreclosure defense attorney has established relationships with lenders and knows who to talk to in order to get results for you.
