Avoid Foreclosure
Posted on July 16, 2008
Filed Under Foreclosures |
If you miss some of your mortgage payments, you may fall into foreclosure. This is the legal way the mortgage company can take over your house. If your home is foreclosed on, you will have to move out of your home. If the home is worth less than what is owed on the mortgage, your mortgage holder could try and get a deficiency judgment against you. If this occurs you will lose your home and you will owe the mortgage company additional money. A deficiency judgment or foreclosure could affect your ability to get credit somewhere down the line. If it is possible to avoid a foreclosure, you should.
First of all, you should not ignore letters that your mortgage company sends you. If you are experiencing difficulty making your mortgage payments you should make contact with your bank or lender immediately. Discuss your financial situation to them. You should also give them information about your finances. If they do not get this information, you may not be eligible for get assistance. It is also important to stay in your home because if you abandon the home, you may not be eligible for get assistance.
There are a few options that are available to you if you want to keep your home. There is special forbearance, mortgage modification and partial claim.
Your mortgage company might be able to offer you a repayment plan depending on your current financial situation. The mortgage company may also be able to provide you with a reduction or suspension of your mortgage payments. You may be able to take advantage of this special forbearance if you have recently had a decrease in income or an increase in your expenses.
Mortgage modification is another option. You might be able to refinance you home loan or extend your loan terms. This could help you catch up with your payments because the payments are reduced to an amount you can afford. You can qualify for mortgage modification if you have gotten over your financial problems but your income is less.
A partial claim is when your mortgage company gets a no interest loan from HUD. When a partial claim is filed, HUD pays the mortgage company the amount of money that is needed to bring your mortgage up to date. A promissory note is executed and a lien is put on the home until the promissory note is paid off.
Other options for avoiding foreclosure are the preforeclosure sale and deed in lieu of foreclosure. A pre foreclosure sale will let you sell your house and pay off your mortgage. With this option, you credit rating is not harmed. A deed in lieu of foreclosure is when you return the home to the mortgage company voluntarily. This will not rescue your house but this will help you get an additional mortgage later down the line.
- You are in default and don’t qualify for any of the other options
- Your attempts at selling the house before foreclosure were unsuccessful and
- You don’t have another mortgage in default.
Housing counselors will be able to help you discover which one of these options if any of them will be what you need. You should also be sure talk about your situation with them.
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