Many try to avoid it, although not anyone can escape from it. Foreclosure is one of the dreaded words that a lot of homeowners are scared of hearing.
Foreclosure is one of the dreaded words that a lot of homeowners are scared of hearing. Many try to avoid it,
although not anyone can escape from it. If you are in the latter situation, there are many available options you can choose from to stop foreclosure. Here are some of the things you should keep in mind:
Loan Mortgage Modification
Mortgage modification is a popular option that is widely used by a lot of homeowners today. In this option, the current contract is fine tuned and adjusted to the current status of the borrower in order to bring the interest rate and payment down. It also decreases the principal balance, transform an adjustable rate into a fixed rate, forgive delinquent payments, and even stop auctions and wonders of all wonders -- foreclosure actions.
How to Know if you’re Qualified for a Loan Mortgage Modification
You are qualified for this if you have recently recovered from a recent financial hardship. Some of these include: death, divorce, separation, military service, loss of job, sickness. If you’ve checked one of them, then you can be a candidate for modification. The situations given above are legally accepted as a form hardship one is going through. It is a temporary situation; therefore, you can afford to pay the new amount now.
Partial Claim
You can also ask if your mortgage lender can do a partial claim. This option gets you a one-time payment from the FHA Insurance fund, or HUD (U.S. Department of Housing and Urban Development). Often, this payment will be the required amount needed to bring your mortgage up to date.
How to Know if You Qualify for a Partial Claim
To qualify, you have to make sure that your mortgage loan has been at least 4 months past due. However, it should not exceed more than 12 months.
Aside from this, you also have to provide financial documents that will guarantee your capacity to pay your mortgage payments on time. After this process, you will be required to sign an interest-free Promissory Note, and a Lien will be given to your property until the Promissory Note is fully paid.
Special Forbearance
This option can also be suggested by your mortgage lender, and usually, he arranges a repayment plan based on your current financial condition. Also, they may also give an impermanent reduction of your monthly mortgage or just postpone your payment for a few months.
How to Know if You Qualify for a Special Forbearance
This is ideal for homeowners that have recently experienced income reduction due to job loss and injuries, or those who need to upgrade their living expenses.
Usually, the start of the process may include your mortgage lender requiring you to provide documents that will prove your financial situation. In some cases, they will also require you to write a Hardship Letter and provide financial documents to prove that you can pay your payment plan.
There are many ways to stop foreclosure, and knowing the right information will certainly help you in making the right choices. Make sure you do your homework before you make the decision that will affect you and your family for a very long time.
