Loan Programs to Stop Foreclosure

Homeowners facing the loss of their homes due to a financial hardship often rely primarily on getting a new line of credit to stop foreclosure. In effect, they are trying to solve a debt problem by taking on more debt, refinancing their mortgage or taking out a personal loan or car title loan to get the funds to pay back the arrears. There are a number of loan products that they may even be able to qualify for, if the foreclosure process has not gone too far, but homeowners should carefully examine their options for foreclosure loans, to make sure they are getting into an affordable payment and not simply postponing the inevitable.

The first obstacle that homeowners facing a financial crisis will have to overcome is a low credit score. Although their credit may be reasonably healthy in the beginning stages of the hardship, once they begin missing mortgage payments, their credit score will drop dramatically and it will be very difficult to obtain any kind of loan, mortgage or otherwise. This will force them to rely on alternate sources of funding, such as private real estate investors, subprime lenders specializing in bailouts, or hard money lenders, that may not offer terms in favor of the homeowners. The qualification guidelines will be drastically more difficult to meet, and costs for these types of mortgages may seem very expensive. Read more »

A Foreclosure Loan May Be the Answer

If you are on the verge of losing your home to foreclosure there are some options you can take if you act now. It may seem rather gloomy if you are facing the possibility of having the bank foreclose on your home, but it may not be too late. A foreclosure loan could be the perfect answer in a difficult time.

Foreclosure Loan Explained

Banks and lending institutions throughout the country have special foreclosure loan programs specifically designed to help people from losing their homes and/or property. A foreclosure loan program is instituted through additional funds from certain companies that are willing to work with certain people.

How Does It Work?

Basically, the short answer is… These companies pay off your old loan and then give you a new loan. The new foreclosure loan stretches out your payments over a longer period of time. By extending your foreclosure loan period it allows you to make payments in an amount you can afford. Each plan will be catered to your specific needs. Read more »

Equity Loan Mortgages May Help Homeowners Prevent Foreclosure

One of the solutions to foreclosure that we discuss much less often than others is obtaining an equity loan to pay off the arrears and reinstate the mortgage. This is because it is one of the more difficult options to qualify for, possibly more difficult than a standard foreclosure refinance. However, for homeowners in the right situation, a second loan taken out of their equity can allow them to get current on their payments again and end the pain of foreclosure. Although it is certainly not suitable for every foreclosure victim, and should not be relied upon as the the only option to save the home, it is a solution that should be considered by every homeowner facing foreclosure.

The reason most lenders refuse to loan to homeowners in foreclosure is because of the pending judgment. The bank often files a lis pendens with the county courthouse, which shows up against the property. This indicates to other prospective lenders that a lawsuit is ongoing against the owners of the property, and there has been no resolution to the court proceedings yet. Many traditional lenders do not want to loan money on a property when there is such a danger of not being paid back. If the lawsuit ends up in a judgment against the homeowners for more than the home is worth, and the house is sold at a county sheriff sale, a second mortgage would more than likely end up with little or nothing. They will not loan the homeowners $50,000 and expect to be paid back only $5,000 or nothing at all. Read more »

It’s Time to Stop Foreclosure and Refinance

Foreclosure and bankruptcy are two of the most traumatic events you may face in life. This unfortunate situation can change your life if you find yourself behind on payments and unable to get ahead. This article will look at some immediate steps you can take to stop foreclosure and refinance your home.

You must first asses your ability to make payments on your loan before you consider the steps that need to be made to stop foreclosure and the refinance options available to you. If you are buried in debt then you may not b able to carry the burden of even a lower payment. You must ask yourself if the lower payment is better for your budget than getting in a lower rent situation. Read more »

Leasebacks, Land Contracts, and Foreclosure Victims

Private investors can assist homeowners in foreclosure in many unique ways that banks simply can not help with. While many are simply looking for great deals on distressed or foreclosed property, attempting to quickly buy low and sell high, others are willing to allow the previous foreclosure victims to live in the house after the foreclosure. This ensures that the homeowners stop foreclosure but also have a second chance to regain their homes, while they avoid the expenses of moving and can concentrate on repairing their credit and becoming financially stable. The investor makes money on the foreclosure property while the homeowners are paying monthly installments, and will collect a lump sum payment when the house is sold back to the homeowners.

While investors can use various financial instruments and documents to put together the agreement between them and the homeowners, the two most commonly used are the land contract and a leaseback or rent to own agreement. Although the terms may be used interchangeably, in some instances, there are more differences between them than similarities. Each provides the homeowners and the investor with a different level of protection and interest in the property, as well as unique advantages and shortcomings. But by understanding the basics of how each works, both parties to the transaction will be able to protect their own interests, while also entering into a mutually beneficial arrangement to avoid the foreclosure. Read more »

The Danger of Being Turned Down for a Foreclosure Loss Mitigation Repayment Plan

Possibly the most recommended way to avoid a foreclosure is for the homeowners to work out an arrangement with their lender to get their payments back on track. Almost every news story, article, and foreclosure blog tell foreclosure victims to call their bank as soon as they miss a payment and try to put together a forbearance agreement, loan modification, or other repayment plan. But homeowners who rely on only this option to save their homes must often wait weeks or months for the bank to review their application, finding out at the last minute that they have been turned down and are now facing the sale of their homes at the foreclosure auction. While attempting a workout program should be the first step for homeowners trying to stop foreclosure, not having a more comprehensive plan will ensure that more foreclosure victims lose their homes than is necessary.

Plenty of homeowners have gone through the lengthy situation of locating, assembling, and submitting all of their personal financial data and having the bank take 1-3 months to “consider” a workout program. In the meantime, the foreclosure victims continue missing mortgage payments, the lender continues accelerating interest, late fees, and court costs, and the foreclosure process continues, as well. This obviously makes for a stressful time, as homeowners are left with seemingly little to do other than wait for the lender’s approval or rejection. Lenders, on the other hand, quite often turn down the homeowners at the last minute, just days or weeks before the scheduled sheriff sale. Because the homeowners may be so far behind, or have not completely recovered from their financial hardship, the lender’s repayment plan may be too expensive and they do not trust that the foreclosure victims will be able to complete the plan and get their mortgage back on track. Read more »

Help for Victims of Foreclosure – The Mortgage Forgiveness Debt Relief Act of 2007 (HR 3648)

The “Sub Prime Mortgage Crisis” has claimed many victims. Subprime adjustable-rate mortgages represented just 7% of all loans, but made up 43% of loans entering the foreclosure process in the third quarter. High powered investors who bought into Structured Investment Vehicles (SIVs) that were backed by high interest mortgage loans could be forced to take it on the chin. However, the big banks and brokers are bailing out these SIVs and in turn, the banks and brokers are being bailed out by loans from the Federal Reserve and foreign investors. The United Arab Emirates and Singapore have helped out American money center banks & Merrill Lynch etc. with billions in fresh cash. But the real victim of this crisis is the little man. He is not likely to get a bailout. Congress has at least given him some tax relief.

Currently over 995,000 homes are in foreclosure according to the Mortgage bankers Association. The year 2007 could be a record one for homeowners in distress. In the past, not only would your credit rating be ruined from foreclosure, but you might also get a tax bill from Uncle Sam as well. The tax code considered forgiven debt from a foreclosure as taxable income. Many times, the lender would report a loss on the foreclosure and issue a 1099C for debt cancellation. Folks who failed to properly address the foreclosure on their returns got an “Under-reporter” letter from IRS. Large tax debts could result from the forgiven debt. Thankfully, Congress has come to the aid of beleaguered homeowners with “The Mortgage Forgiveness Debt Relief Act of 2007.” Read more »

FHA Secure Loans – Foreclosure

WHAT IS FHA Secure

FHA Secure is designed specifically to address the needs of homeowners who are now facing inevitable foreclosure as result of mortgage payments adjusting beyond their means of affordability. WHO IS ELIGIBLE To qualify for FHA Secure, and include the delinquent loan payments, homeowners wishing to refinance must meet the following requirements:

Have a non-FHA insured ARM that has reset

Sufficient income to make the mortgage payment and

A history of on-time mortgage payments before the loan reset

Homeowners who are current on their conventional mortgages must have sufficient income to make the mortgage payment. By refinancing into a FHA insured mortgage, you can expect to pay lower monthly mortgage payments. FHA Secure can improve the quality of life for many communities by helping to reduce the number of mortgage defaults and bringing greater stability to local housing markets. Read more »

Stop Foreclosure By Using A New Government Program

If your adjustable rate has pushed your mortgage payment to unaffordable levels, you may have some relief. In response to the crisis of people facing default on their home mortgages because their adjustable rate mortgages are no longer affordable, the Federal Housing Administration is coming out with the FHA Secure Refinance Program.

The new FHA Secure program would help home owners who have fallen behind on their home mortgage and are possibly facing foreclosure because of their new higher monthly payments. The new program would allow the delinquent home owners to refinance their Adjustable Rate Mortgages into a fixed rate FHA loan. The FHA Secure program is intended to help homeowners that may have been tricked into expensive Adjustable Rate Mortgages with teaser interest rates. If you qualify for an FHA mortgage your loan will be funded by a conventional mortgage lender.

Remember, FHA mortgage loans are insured by the Federal Housing Administration. The FHA does not lend money; they simply insure your debt with an approved FHA lender. Read more »

Foreclosure – Wait For The Government Or Solve Your Problem Yourself?

As many as 2.5 million families will lose their homes in 2007 due to foreclosure. The White House and congress are working toward legislation that would enable homeowners facing foreclosure to refinance their mortgages. However, if you think you may be in danger of losing your home, should you wait for relief to crawl through the legislative process, or take action yourself?

You know the answer.

Communication is key

Your lender does not want to foreclose on your home. Lenders are in the business of selling mortgages, not homes. Foreclosures are a headache for lenders.

But your lender doesn’t have a crystal ball. You know if you’re in trouble or not, so it’s up to you to take the first step. If you know your payments are going to be late, call your lender to alert him. If you receive letters or phone calls from your lender, respond immediately. Cooperation is a two-way street. Read more »