NEED HELP? YOU CAN’T MAKE YOUR MORTGAGE PAYMENT!
Every day thousands of people like you have trouble making the next mortgage payment. The unexpected challenges of life can take the responsibility of home-ownership a tough one.
Tough things may seem hopeless, but help is available. Contact Denny Stone today.
Avoid Foreclosure Tips and Options – Just know that you have options, and your Lender/Servicer will help you find a way to keep your home and avoid foreclosure.
Whether you’ve been affected by the COVID-19 pandemic, or you are facing another hardship, getting back on track is just a few easy steps.
Avoid Foreclosure Tips –You need to take the first step!
If you ignore the problem, you may lose your home to foreclosure, possibly affecting your ability to qualify for credit or to rent another home.
Three key things to do To Help Save Your Home from Foreclosure…
1. Assess Your Financial Situation
Avoid Foreclosure Tips – Ask yourself these two questions:
- What is your financial hardship?
- Is your hardship temporary or long-term?
Hardships include unemployment, divorce, illness, or a natural disaster that makes it challenging to pay your mortgage in a timely manner.
If you are experiencing financial hardship because of the COVID-19 pandemic, you may be eligible for mortgage assistance.
A short-term hardship is an event or circumstance expected to resolve within twelve months, whereas a long-term hardship extends longer than 12 months.
This information is something your Lender/Servicer will need to know to determine the best option to help you.
If you’re not behind now but foresee that making future mortgage payments could become troublesome, you should act immediately to seek solutions.
2. Contact Your Mortgage Lender/Servicer
Avoid Foreclosure Tips by contact your Lender/Servicer right away. Your Lender/Servicer is the company where you send your mortgage payments.
They will be your best resource to help identify the solution that’s right for your individual situation.
You can find a contact number on your mortgage statement.
If you’re in default, avoid foreclosure tips… make sure to respond to their outreach efforts to begin the conversation.
When you call, be prepared to explain:
– Why you are unable to make your mortgage payments.
– Whether the problem is temporary or permanent.
– Details about your income, expenses, and other assets like cash in the bank.
Avoid Foreclosure Tips – If you are uncomfortable talking to your Lender/Servicer, a HUD-approved housing counseling agency can help you understand your options. These services are free of charge.
Open all the mail you receive from your Lender/Servicer. It contains valuable information about repayment options. Later mail may have important legal notices.
Failing to read the mail will not prevent a foreclosure action.
3. Understand Your Options
Your Lender/Servicer will work with you to determine the approach that best fits your circumstance and arrive at a solution together to avoid foreclosure.
Avoid Foreclosure Tips – Options to Keep Your Home and Bring the Mortgage Current
Refinance Your Mortgage
What Is It?
Typically, a refinanced mortgage will have a lower interest rate than your existing rate; or you may replace an adjustable rate with a fixed rate which may be more affordable
Who is it best for?
Avoid Foreclosure Tips – If you are current on your mortgage payments but would benefit from a reduced payment in the future.
What documents do I need?
Check with your Lender/Servicer to determine what you need to do to apply.
Full Reinstatement of Your Mortgage
What Is It?
Avoid Foreclosure Tips – An option where you pay the total delinquent amount in a lump sum (including taxes and insurance premiums paid, delinquent interest, any legal costs, and other expenses incurred by the Lender/Servicer) to restore your delinquent mortgage to current status.
Who is it best for?
If your hardship has ended and you are able to make a lump-sum payment.
What documents do I need?
No documentation is required, but you may receive an offer for reinstatement after a conversation with your Lender/Servicer or submission of the Mortgage Assistance Application.
Additional Options to Keep Your Home and
Bring the Mortgage Current
Partial Reinstatement
What Is It?
An option is if you can still make your mortgage payment but are not able to pay the total delinquent amount at once. Your Lender/Servicer will establish a repayment plan for the rest of the amount you owe after you make a lump sum payment.
Who is it best for?
If your hardship has ended and you are able to make a lump sum payment, but not the full delinquent amount all at once.
What documents do I need?
No documentation is required, but you may receive an offer for a partial reinstatement after a conversation with your Lender/Servicer or submission of the Mortgage Assistance Application.
Mortgage Repayment Plan
What Is It?
Allows you to bring your mortgage current over a short period of time by paying a little more than your original monthly mortgage payment. A repayment plan must be longer than one month, but no more than 12 months.
Who is it best for?
If you can afford your regular monthly payment plus a little more for a period of time.
What documents do I need?
Repayment plans must be in writing and your Lender/Servicer must send you a copy. You may receive an offer for a repayment plan after a conversation with your Lender/Servicer or submission of the Mortgage Assistance Application.
Keep the Home and Adjust the Mortgage Terms
Forbearance
What Is It?
An agreement between you and the Lender/Servicer for you to either suspend or reduce your monthly mortgage payments for a limited period.
Who is it best for?
If you are currently unable to make your monthly mortgage payments but foresee returning to making payments soon.
What documents do I need?
You do not need to submit any documentation to receive an initial forbearance. You may receive an offer for a forbearance plan after a conversation with your Lender/Servicer or submission of the Mortgage Assistance Application.
Mortgage Payment Deferral
What Is It?
Payment Deferral is a servicing relief solution designed to resolve delinquencies and help homeowners remain in their homes. It enables deferred payment amounts to create a non-interest-bearing forborne balance that will become due at a later date.
Who is it best for?
Homeowners whose hardship has been resolved and a repayment plan or full reinstatement of the mortgage is not a viable option to resolve the delinquency.
What documents do I need?
A Payment Deferral agreement, or Lender/Servicer equivalent, should be sent to the homeowner no later than five days after the completion of the Payment Deferral.
Freddie Mac Flex Modification®
What Is It?
An option with up to a 20% payment reduction that permanently changes one or more of the original terms of your mortgage (such as the interest rate and mortgage term).
Who is it best for?
If you have fallen behind on your mortgage and would benefit from a permanent payment reduction.
What documents do I need?
You must submit a Mortgage Assistance Application along with other documents requested by your Lender/Servicer (depending on the nature of
your hardship).
If Saving Your Home from Foreclosure Fails – Leaving Your Home
Short Sale
What Is It?
An option is to sell your house for an amount less than the full amount you owe. In some cases, your Lender/Servicer may offer you an incentive to help with your transition to more affordable housing.
Who is it best for?
You can no longer afford your mortgage payment, or you need to relocate and all other options to remain in your home have been exhausted.
What documents do I need?
You must submit a Mortgage Assistance Application along with documents requested by your Lender/Servicer (depending on the nature of your hardship).
Deed-in-lieu of Foreclosure
What Is It?
A voluntary transfer of the property title to Freddie Mac in exchange for a discharge of the mortgage debt. This is typically a last resort when other options have failed or will not work. Your Lender/Servicer may offer you an incentive to help with your transition to more affordable housing.
What Is It?
This option allows you to avoid foreclosure and make a graceful exit from your home when all other options have been exhausted.
What Is It?
You must submit a Mortgage Assistance Application along with documents requested by your Lender/Servicer (depending on the nature of your hardship)
NOTHING IS WORSE THAN DOING NOTHING!
WHAT OPTIONS WILL HELP ME KEEP MY HOME – FHA-insured loans?
Avoid Foreclosure Tips – FHA provides, as part of its insurance contract with lenders, loss mitigation actions the lender must evaluate and take, when appropriate, to reduce financial losses on loans in default.
Your lender needs information from you to fully evaluate these options.
If you want to keep your home, talk to your Lender/Servicer about available workout options for home retention.
While the following options listed here are for borrowers with FHA-insured loans, most Lender/Servicers offer similar workout plans designed to help you keep your home.
Special Forbearance.
Your lender may provide for a temporary reduction or suspension of your payments to allow you time to overcome the problem that reduced your income.
Then you may be offered a payment plan so you can pay back the missed payments a little at a time until you are caught up.
An extended forbearance period may be provided to unemployed borrowers who are actively seeking employment.
Mortgage Modification.
A modification is a permanent change to your loan through which the overdue payments may be added to your loan balance, the interest rate may be changed or the number of years you must pay off the loan may be extended.
Partial Claim.
In a Partial Claim, a borrower receives a second loan in the amount necessary to bring the delinquent loan current.
The loan is interest-free and does not need to be repaid until you pay off your first mortgage or sell your house.
This option is only available to borrowers with FHA-insured loans. However, if you have a conventional loan, ask your lender if they offer an “advance claim.”
FHA-Home Affordable Modification Program (FHA-HAMP).
This option combines an enhanced partial claim with a loan modification.
Under the FHA-HAMP, the partial claim loan will not only include any amounts necessary to bring your mortgage current but may also include an amount to reduce your existing loan balance by up to 30%.
The reduced loan balance will then be modified to lower your monthly mortgage payment to an affordable level.
As described above, the partial claim loan is interest-free but must be repaid when you pay off your first mortgage or sell your house.
To qualify for any of these options, you will need to provide your lender with current information about your income and expenses.
Also, your lender may require that you agree to a payment plan for three or more months to demonstrate your commitment before you are approved for a modification or partial claim.
WHAT OPTIONS DO I HAVE IF I CAN’T KEEP MY HOME?
If your income or expenses have changed so much that you are not able to continue paying the mortgage even under a workout plan offered by your lender, you should consider the options below.
Pre-foreclosure home sale.
With your lender’s permission, you can offer your house for sale and sell it at fair market value even if the amount you receive from the sale is less than the amount you owe.
If you meet certain conditions, you may be eligible to receive relocation expenses.
Deed-in-lieu of foreclosure.
As a last resort, you may be able to voluntarily give your property back to your lender. If you leave the property clean and undamaged you may be eligible to receive relocation expenses.
There could be income tax consequences to any plan that reduces the amount of debt you owe so check with a tax advisor before accepting these workout options.
CONCLUSION – Avoid Foreclosure Tips
WHAT IS FHA?
The Federal Housing Administration is part of the U.S. Department of Housing and Urban Development (HUD).
FHA provides mortgage insurance to approved lenders who in turn offer mortgage loan financing to individuals and families throughout the United States and territories.
The FHA mortgage insurance enables approved mortgagees to provide home loans to eligible borrowers who might not otherwise qualify for other mortgage loan financing.
FHA borrowers are often first-time homebuyers, moderate-income families, or folks who can’t afford a large down payment.
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