Avoiding Foreclosure

If you fall behind in your mortgage payments, you face the threat of foreclosure.

Foreclosure means your lender can take over your home, and you must move out. If your house is worth less than the amount you owe on your mortgage loan, your lender may even seek a deficiency judgment. If this happens, you not only lose your home, you may owe the mortgage holder an additional amount of money. For example, if your house is worth, say, $180,000 and you owe $190,000, you could be hit with a judgment for $10,000 that you would have to pay out of your pocket. Both foreclosures and deficiency judgments will have a very negative effect on your credit record, which makes it harder for you to get credit in the future.

Do not ignore any letters you receive from your mortgage company. Contact the company immediately. Explain why you are having trouble meeting your payments. Be prepared to provide financial information showing your monthly income and expenses. If you can show your mortgage company that the problem is short term and that you have a plan for resolving it, the company may be more willing to work with you.

If you have a FHA-insured loan, contact a HUD-approved housing counseling agency. Call 800-569-4287 to get the address and phone number of the counseling agency nearest you. A housing counseling agency is a valuable resource as it will have information on services and programs offered by the U.S. Government, and by private and community organizations that may be able to help you. The agency may even offer credit counseling. And its services are usually free.

What are your alternatives?

Special Forbearance.

If you are honest with your lender and have legitimate reasons for having missed mortgage payments, your lender may be willing to arrange a repayment plan based on your financial situation. The company may even offer a temporary reduction or suspension of your payments. This is especially true of you have recently experienced a reduction in your income, the loss of a job or an increase in living expenses. In this case, you must be able to furnish your lender with financial information showing that you can meet the requirements of the new payment plan.

Mortgage Modification

A second alternative is to refinance your debt or extend the term (length) of your mortgage loan. This can help you catch up by reducing your monthly payments to a more affordable level. You may qualify for a refinance or an extension. if you can show that you have recovered from your financial problems and can afford the new payment amount.

A third alternative is a pre-foreclosure sale. This allows you to avoid foreclosure by selling your house for an amount less than the amount you need to pay off your mortgage loan. To qualify for a pre-foreclosure sale, you must be at least two months delinquent in your payments, you are able to sell your house in three to five months, and a new appraisal of your home's value shows that it is worth less than the amount owed on the mortgage loan.

As a last resort, you maybe be able to voluntarily "give back" the house to your lender. Obviously, this won't save your house but is not as damaging to your credit rating as foreclosure. This is called deed-in-lieu of foreclosure. To qualify:

1. You are in default and do not qualify for any of the other options;

2. You tried to sell the house before foreclosure but were unsuccessful; and

3. You don't have another FHA mortgage in default.

How do you know if you qualify for any of these alternatives? Your lender will help you determine this. If you have an FHA loan and use a housing counseling agency, the agency can help you determine which, if any, of these options might meet your needs, and will also help you with your lender.

Foreclosure is always bad news. The good news is that you can avoid foreclosure. All it takes it honesty and a lender who will work with you.

For FREE help with debt and credit, subscribe today to Douglas Hanna's free email newsletter "8 Simple Steps to Debt Relief" at http://www.all-in-one-info.com

In The News:


pen paper and inkwell


cat break through


Mortgage: Effective Household Investment for Financial Autonomy

If finances had a copyright, we would have bought it... Read More

Refinancing vs Line of Credit

Refinancing vs line of credit are two popular options you... Read More

What On Earth are Home Equity Loans?

Home equity loans are one of the most common types... Read More

Sub-Prime Mortgage Loans - Things You Should Know About Sub-Prime Mortgages

Sub-prime mortgages are not that much different from average mortgages.... Read More

Self Employed Mortgage Loan ? Getting a Mortgage When You?re Self Employed

Being self employed has many benefits. When you are self-employed,... Read More

Home Equity Loan Risks

Home equity loans give individuals a tool to extend their... Read More

Debt Counseling ? Healing Touch for the Ailing Finances

The financial stories remain similar over the months and the... Read More

Cardinal Principle of Homeowner Personal Loans ? It is a Solution for Any Sort of Financial Funding

You bought a house and you were promoted to the... Read More

Kings Bay Saint Marys & Kingsland Georgia - Affordable Home Mortgages

Buying a home is usually the largest purchase any of... Read More

What Are Mortgage Brokers And Why To Use One

"Mortgage" is formed from two words: the French word "mort"... Read More

Understanding Mortgage Points

When a mortgage broker asks a borrower to pay points,... Read More

I Have A Slice of the American Dream and It is a 30 Year Nightmare

Well, we did it. We are buying a beautiful, brand... Read More

Buying a New Home ? Home Buying Tips

If you in the process of looking for your first... Read More

Secrets Your Banker Wont Tell You - Which Loan is Best for You?

Recently I was driving in my Car and I heard... Read More

Choosing The Right Mortgage For You

This article will help you understand the differences between a... Read More

Finding the Best Home Improvement Loan Rate

If you're looking for a good home improvement loan rate,... Read More

Buy to Let Mortgages

Finding the right buy to let mortgage is crucial to... Read More

2nd Mortgage - Better Than Refinancing

You have probably received refinancing offers in the mail or... Read More

Florida Refinance - Refinancing in Florida

The decision to buy a home in Florida can be... Read More

Ending Your Private Mortgage Insurance Early

Private mortgage insurance, or PMI, is the safety net of... Read More

Reverse Mortgages: When Is One Right For You?

How do you know if a reverse mortgage is right... Read More

Helpful Mortgage Advice

Mortgage advice overwhelming you? Many people get advice from everyone... Read More

First Time Buyer Home Loans - Things To Consider When Applying Online

As a first time home buyer, there are several things... Read More

Consolidate Debt With A Home Equity Loan

If you are a home owner who is having to... Read More

Understanding Fixed-rate Mortgages

A fixed-rate mortgage is a mortgage on which the interest... Read More

Home Loans and Mortgages ? Tips to Avoid Foreclosure

Today's real estate market is a volatile one; prices are... Read More

Which is Better? Fixed-Rate or Adjustable-Rate Mortgages

The answer depends on several factors including your financial situation.... Read More

Homes, To B(uy) or Not to B(uy)

Whether you are just moving out on your own for... Read More

Home Buyer Beware ? Know the Signs of Real Estate Market Trouble

Lots of articles have appeared recently about the booming real... Read More

Home Equity Loans Can Provide Cash in a Hurry

Think About the Long Term. Estimate how long you expect... Read More

Refinancing Your House - How to Know Whether to Refinance or get a Second Mortgage

Refinancing your house's mortgage is not the same thing as... Read More

Mortgage-Refinance Loan Can Put Cash in Your Pocket

Do you need cash? Here's a mortgage for you. If... Read More

Subprime Mortgage Lenders - Helpful Tips When Getting a Subprime Mortgage Loan

If you have bad credit history, no down payment or... Read More