Five tips to protect your home foreclosure
Here’s an interesting article from the Federal Reserve for people who have problems paying the mortgage on your house. There are also several links to help you find more information about this topic. One of the most important things you should do is understand that there are many organizations that are helping people cope with this problem. I hope these tips will help:
Do not ignore the problem of your mortgage.
If you can not pay, or has not paid, your mortgage, contact your lender or the company that collects your mortgage payments as soon as possible. Mortgage lenders want to work with you to resolve your problem, and you can have more options if you contact them in advance. Call the phone number indicated on your statement or coupon book. Explain your financial situation and offer to work with their lenders to find a payment option that is best for you. If your lender does not want to talk to you, contact a counseling agency in housing issues.
Learn before you talk to your lender or counselor in housing issues.
Search all original documents and study them on your mortgage. Review your income and budget. Collect information on their costs, basic services including food, car payments, insurance, cable, telephone and other payables. If you do not feel comfortable with talking to your lender, contact a credit counseling agency or housing. Counselors can help you examine your budget and determine what options are available to you. They can also advise on how to contact your lender or may be offered to negotiate with the lender on their behalf.
Know your options.
Some options will provide solutions or short-term aid, while others offer permanent or long term solutions. You are able to create a temporary plan to cover payments that are pending or may modify the terms of your loan. Sometimes the best option might be to sell your home. For information on the different options, visit HUD’s website or go to resources available to consumers in the event of foreclosure (English) for links to local resources.
Stick to your plan.
Protect your credit score by making timely payments. Place in order of importance to their accounts and pay those that are most needed, as is the case for your new mortgage payment. Consider cutting optional spending such as eating out and services premium cable television. If your situation changes and you can not continue with your new payment schedule, call your lender or adviser on housing issues.
Be wary of rescue scams foreclosure.
There are scammers who prey on people who have fallen behind in paying their mortgages and are about to lose his house. These criminals are usually called “advisors.” Your lender, or a legal adviser in matters of housing, can help the best way to decide what is best for you. For tips on how to recognize a scammer, visit the Web site of the Federal Trade Commission, section Scams foreclosure rescue. Report any suspicious situation to state agencies and local consumer protection. Can be found on the Web site of Consumer Action.
There are several options available to them. Some of them will provide a temporary solution for short-term problems, such as being late on your payment by one or two months due to illness. Other options that are permanent reflect long-term financial difficulties, such as having lost their jobs, or being in long term unemployed. If you have a loan approved Federal Housing Agency (FHA for its acronym in English), there are special programs for the amendment of loans that are available to you, ask your lender about them. Unfortunately, in some cases, may not be possible to keep your home, however, there are options available to handle such situations.
Temporary solutions for short-term economic problems:
* Restoration: Lenders often have the desire to “restore” your loan as long as you make late payments in a lump sum, on a specific date. This option may also include a plan specific tolerance.
* Tolerance Plan: Your lender may be able to provide a temporary reduction or suspension of mortgage payments for a short period, such is the case of 3-4 months. After this time, your lender will work with you to create a plan of settlement of payments on account of this loan. You may qualify for this plan of tolerance if you are experiencing a reduction in their income (for example, if you are unemployed) or if the cost of living increases (for example, higher payments for medical services). You must provide information to your lender, which shows their ability to adhere to this new payment plan.
* Payment Plan: Your lender may accept the payment plan that includes your regular monthly payment plus an amount representing a portion of the payments due to be paid each month until their payments are completed.
Adjustments or long-term solutions for your loan:
* Changes to your loan: Your lender will have the will to rewrite the terms of your original mortgage, stating your financial situation. The purpose of the amendment to a loan, is to offer the advantage that your mortgage payments are within your ability to pay. Changes to your loan may include extending the number of years to pay the mortgage and the change in the rate of interest, including changing an adjustable rate to a fixed interest rate. You must pay a processing fee to obtain this loan modification.
* Partial Claim: If your mortgage is insured by private mortgage insurance company, your lender might help you process this claim. Some insurers provide a loan without interest, for the first and only time, so you can update your mortgage payments. This loan, without interest, due when you make a refinance, pay the full amount of your mortgage, or when you sell your property.
If keeping your house is not an option, you may consider these alternatives:
* Sale: Generally, your lender will give you a specific period of time to find a buyer and pay your mortgage in full. Your lender may ask you to use the professional services of a real estate agent to help you sell your property.
* Preliminary Implementation mortgage or short sale: If you can not sell their property for the full value of the loan, your lender may accept the amount you received from the sale of the house, although this is less than the total value of amount of your loan. You must pay income taxes due to the difference between the amount you owe and the amount you are willing to pay. For more tax information, inquire at the offices of the IRS (Internal Revenue Service)
* Ownership: A qualified buyer may be allowed to assume (take over) your mortgage. Ask your lender if this option is available to you.
* Writing Assignment due to foreclosure: You have the ability to “give back” the property to the lender, who then forgive the debt balance. Again, there may be consequences associated with their taxes, so you must request information from the IRS. This option allows you to save your property, but represents minor damage to your credit score. Some lenders impose restrictions on taking back the property. For example, they may request that you try to sell the property to a market acceptable price within 90 days.
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