How to Avoid Foreclosure
AVOIDING FORECLOSURE Not being able to pay your home mortgage can be a result of an illness, job loss, death in the family or some other sort of unexpected life changing crisis.
No matter what the circumstance is the consequences of not paying your mortgage are extreme.
Your credit will be impacted and you run the risk of your home going into foreclosure.
This means your lender will take over ownership of your residence.
A foreclosure will leave a negative impression on your credit for many years; making it difficult to get approved for any type of new credit or loan.
Outlined below is information that will help you avoid foreclosure.
Dealing with a foreclosure letter If you receive this type of letter, your situation is very serious and needs to be addressed immediately.
Get in touch with your lender and explain to them why you have not made your payments.
They will likely be able to help you work out some sort of payment plan.
In order for them to assist, you will probably have to provide financial information including your monthly expenses and income.
What are the alternatives to foreclosure? Consumers in financial trouble have several options: Mortgage Modification- Your lender will permit you to refinance your mortgage and blend your debt into your new loan.
You can also choose to extend the term of your home mortgage.
Mortgage modification helps create a lower, more affordable payment which will allow you to 'catch up'.
Special Forbearance - Your lender will offer you atemporary reduced repayment plan.
It is even possible that you will be allowed to stop making payments for a short period of time.
Pre-foreclosure sale - Foreclosure is avoidable if you sell your home, typically for an amount that is less than what you are obligated to pay.
You must be 2 months delinquent and be able to sell your home within 3 - 5 months in order to qualify for a pre-foreclosure sale.
Deed-in-lieu of foreclosure - Utilizing this alternative results in you giving your home to your lender.
Yes, you lose your home, but your credit is not as adversely affected as if you experience foreclosure.
If you are already in default on your mortgage and can not qualify for any of the options listed above, then you may qualify for a deed-in-lieu of foreclosure.
You can also achieve qualification if you are unable to sell your home before the foreclosure was instated.
How do I know if I qualify for any of these foreclosure alternatives? Contact your lender.
They will help you figure out what the best option for your situation is.
Identifying 'avoiding foreclosure' scams? There are many companies out there that are going to look to take advantage of you during your time of financial duress.
The most important thing to remember is 'if it is too good to be true, then it is!'.
'Equity skimming' is one of the most common types of scams.
This occurs when you are approached by a company or even an individual claiming that they will help you by paying your mortgage or by providing you with cash once your home is sold.
They will then propose that you move out of your residence and transfer the deed to their name.
They do not pay the mortgage and the home goes into foreclosure.
Just because you sign the deed over to someone else, you are still obligated to pay your loan! You can avoid becoming a victim of a foreclosure scam by considering the following: - Never sign anything unless you are 100% clear about what it is your are committing to.
- Every promise or guarantee made to you should be obtained in writing.
- Any contract of sale or loan assumption needs to clearly indicate that you are being released of your responsibilities of the home mortgage debt.
- All potential deals need to be presented to your lawyer to ensure that they are fair and valid.
- Get in touch with your State Real Estate Commission, your state's Attorney General and/or local District Attorney to make certain that the buyer of your property has no complaints issued against them.
In conclusion..
..
A foreclosure is very serious and should be taken care of immediately.
You don't want to lose your home and/or further damage your credit.
No matter what the circumstance is the consequences of not paying your mortgage are extreme.
Your credit will be impacted and you run the risk of your home going into foreclosure.
This means your lender will take over ownership of your residence.
A foreclosure will leave a negative impression on your credit for many years; making it difficult to get approved for any type of new credit or loan.
Outlined below is information that will help you avoid foreclosure.
Dealing with a foreclosure letter If you receive this type of letter, your situation is very serious and needs to be addressed immediately.
Get in touch with your lender and explain to them why you have not made your payments.
They will likely be able to help you work out some sort of payment plan.
In order for them to assist, you will probably have to provide financial information including your monthly expenses and income.
What are the alternatives to foreclosure? Consumers in financial trouble have several options: Mortgage Modification- Your lender will permit you to refinance your mortgage and blend your debt into your new loan.
You can also choose to extend the term of your home mortgage.
Mortgage modification helps create a lower, more affordable payment which will allow you to 'catch up'.
Special Forbearance - Your lender will offer you atemporary reduced repayment plan.
It is even possible that you will be allowed to stop making payments for a short period of time.
Pre-foreclosure sale - Foreclosure is avoidable if you sell your home, typically for an amount that is less than what you are obligated to pay.
You must be 2 months delinquent and be able to sell your home within 3 - 5 months in order to qualify for a pre-foreclosure sale.
Deed-in-lieu of foreclosure - Utilizing this alternative results in you giving your home to your lender.
Yes, you lose your home, but your credit is not as adversely affected as if you experience foreclosure.
If you are already in default on your mortgage and can not qualify for any of the options listed above, then you may qualify for a deed-in-lieu of foreclosure.
You can also achieve qualification if you are unable to sell your home before the foreclosure was instated.
How do I know if I qualify for any of these foreclosure alternatives? Contact your lender.
They will help you figure out what the best option for your situation is.
Identifying 'avoiding foreclosure' scams? There are many companies out there that are going to look to take advantage of you during your time of financial duress.
The most important thing to remember is 'if it is too good to be true, then it is!'.
'Equity skimming' is one of the most common types of scams.
This occurs when you are approached by a company or even an individual claiming that they will help you by paying your mortgage or by providing you with cash once your home is sold.
They will then propose that you move out of your residence and transfer the deed to their name.
They do not pay the mortgage and the home goes into foreclosure.
Just because you sign the deed over to someone else, you are still obligated to pay your loan! You can avoid becoming a victim of a foreclosure scam by considering the following: - Never sign anything unless you are 100% clear about what it is your are committing to.
- Every promise or guarantee made to you should be obtained in writing.
- Any contract of sale or loan assumption needs to clearly indicate that you are being released of your responsibilities of the home mortgage debt.
- All potential deals need to be presented to your lawyer to ensure that they are fair and valid.
- Get in touch with your State Real Estate Commission, your state's Attorney General and/or local District Attorney to make certain that the buyer of your property has no complaints issued against them.
In conclusion..
..
A foreclosure is very serious and should be taken care of immediately.
You don't want to lose your home and/or further damage your credit.
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