Facing a Foreclosure can be very stressful and depressing. For many a foreclosure is the beginning of financial devastation for themselves and their family. Many people still have a chance to come out of a foreclosure process with piece of mind.
Learn how you can possibly prevent foreclosure or come out of the process with your head still above the water.
* One of the ways you can save yourself from going into foreclosure all together is to set up a home equity line of credit. With a home equity line of credit you just write yourself a check when an emergency arises such as a missed mortgage payment. Whenever you get yourself back in order you pay the amount back.
* Enter into a forbearance agreement. For a temporary hardship, lenders might grant a forbearance agreement to lower or eliminate payments for a limited time.
* Consider loan modification. A loan modification seeks a permanent change to the loan, such as lowering the payment and extending the loan’s term.
* Another thing you can do is talk to your bank if you start receiving letters about missed payments. Contrary to popular belief the banks want you to be able to make a payment. Banks hate having to recapture a property because it is more work for them and they lose money.
* It may be possible to refinance your mortgage for a lower interest rate and/or lower monthly payment. However, if you already have had late payments on your mortgage, the interest rate offered to you may be too high to lower your monthly payment.
* The faster you contact the bank the more option you have during a foreclosure. Just because the process started does not mean if you don’t come up with the back payments you will lose your home. In some cases you may not even have to repay the full amount. The top way many people lose their home is bye waiting too long to start negotiating with the bank.
* Obtain a “deed in lieu” of foreclosure. A “deed in lieu” essentially allows the borrower to return the title or deed of the property – giving the home back – to the mortgage holder to avoid foreclosure.
* Just knowing how to slowdown the foreclosure process and knowing who to talk to will practically save you time, money, and energy.
In many states, foreclosure rates have already started to increase, especially impacting the segment of the population that carries adjustable-rate mortgage loans, whose payments climb upward with every interest-rate increase. However, homeowners can make choices – ideally, before they purchase a home, but even after problems arise – that will help them keep a home, or at least minimize the damage a foreclosure could have on their futures.
Government Mortgage Relief Programs
The new foreclosure prevention initiative, called FHA Secure, is administered by the Federal Housing Administration (FHA) and is a mortgage insurance program for borrowers who have good credit but have still fallen behind in monthly payments due to resetting interest rates that increased those payments significantly.
Under the terms of this initiative, the FHA can offer homeowners and affordable option that permits them to refinance their existing mortgages and make payments. This program, along with other FHA programs, will provide important help to more than 240,000 families. The target for the initiative is families who could have a foreclosed home due to the unavailability of refinancing options.