Strategies for Foreclosure Prevention
The recent economic trouble facing the United States, as well as other countries has created new challenges for individuals, businesses and governments. The mortgage foreclosure crisis in the US has resulted in millions of families losing their homes. If you are at risk of foreclosure, there are foreclosure prevention strategies that can help you avoid foreclosure.
The most important step you can take is to act quickly when you are experiencing difficulty in making your payments. Often, homeowners get scared and frustrated when facing financial hardship. They ignore the problem because they are unsure of how to handle the situation, but this only makes matters worse. Acting quickly is the best foreclosure prevention strategy.
Foreclosure Prevention Steps:
The first step to take when facing the possibility of foreclosure or falling behind in your payments is to be honest with the mortgage lender. Don’t ignore the phone calls and letters, hoping the problem will go away. It won’t. It will only get worse and more difficult to resolve the further into the process it gets. Contacting the lender and explaining that you are having problems, but working to get on track is the best way to solve the problem.
When facing financial hardship and dealing with your lender, it is important to understand that you are not alone and you are hardly the first homeowner to be contacting the company about problems making monthly payments, particularly in light of the current housing crisis. Lenders offer solutions for foreclosure prevention, so getting in touch quickly is the best option. Some of these strategies include loan modification, repayment plan, deed in lieu of foreclosure, short sale, and forbearance.
Loan Modification: President Obama created the Making Home Affordable Act in order to help homeowners in danger of foreclosure, either now or in the future with this foreclosure prevention solution. This program allows the terms of a home mortgage to be modified to help homeowners avoid foreclosure. This is done by changing the terms of the loan, reducing the interest rate and creating a new, more affordable mortgage. Professional foreclosure prevention services often are able to get better results than the homeowner can get through negotiating with the lender.
Plan for Repayment: In some cases, the lender and homeowner are able to come up with an agreement for repayment of the past due balance on the loan. This is done by having the homeowner pay a portion of the past due amount and making an agreement to repay the arrears within a specified period of time, often by adding an extra amount to the monthly mortgage payment in order to bring the loan current.
Deed in Lieu of Foreclosure: This foreclosure prevention strategy involves giving the house back to the lender to avoid the whole foreclosure process. It is important to seek the advice of professional foreclosure prevention services to negotiate the best settlement possible to help you avoid owing the difference between the amount owed on the loan and the amount the lender can get by selling it.
Short Sale: A short sale involves selling the home for less than the full amount owed on the loan. This involves selling the home for less than the full price. It is important to make sure the bank won’t come after you for the deficiency. There are tax and credit consequences to short sale, so get professional advice before signing an agreement.
If you are behind in your monthly mortgage payments, or will soon be unable to continue making monthly payments. Integrity First can help with our professional foreclosure prevention services. Please contact us to learn how we can help your family avoid foreclosure.