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 »

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 »

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 »

Loan Modification – Learn How To Effectively Save Your Home From Foreclosure

A loan modification is an agreement that is negotiated with your current lender that changes the terms of your current loan. Lenders are willing to negotiate when borrowers are facing financial difficulties and can’t obtain other financing alternatives. You must show the lender why it would be in the lender’s best interest to agree to a workout arrangement. If convinced, a lender may be willing to reduce the loan interest rate, reduce monthly payment amounts or change other loan terms.

A loan modification generally occurs where the parties to a problem loan mutually agree to workout the problem by creating new and better loan terms. The hope is that the new loan will enable to the borrower to meet their obligations.

When applying for a loan modification, make a game plan on how exactly you are going to approach them. These people are trained in minimizing loss for their company and they get paid to by getting the most amount of money out of you as possible or declare that your case is un workable and foreclose on you. That is how they mitigate loss. If you understand this, then you’ll know that you have to approach them and all conversations very carefully. Everything can and will be used against you. Read more »

Avoiding Foreclosure

If the property is sold for less than the total amount owed on the mortgage loan, the mortgage company or HUD could seek a deficiency judgment against you. A deficiency judgment could seriously affect your ability to qualify for credit in the future. Even worse, it’s a one way street. Surplus funds are not returned to former homeowners. With much to loose & nothing to gain, foreclosure should be avoided at all costs.

Do Not Ignore a Breach / Notice of Default Letter From your Mortgage Company

Contact the mortgage company immediately. Explain the situation. Be prepared for the bank to request financial information, such as monthly income and expenses. Without this information, they may not be able to assist. Never abandoned the property. This could disqualify you from receiving any further assistance.

CONTACT THE LOSS MITIGATION DEPARTMENT: Loss mitigation is different from the lenders collection department. Collections will likely demand all monies owed right now. Loss mitigation is designed to work with you to come to an agreement about how to resolve the debt. Get any agreement in writing. If they do not provide one, send them a certified letter outlining any agreements reached. Read more »