How to Avoid FHA Foreclosure
With the US economy in recession, the fear of home foreclosure is looming large on many families. A shocking 1.3 million homes have been forced into foreclosure since the beginning of the melt down in the last quarter of 2007. In these trying times, it is imperative that every family maintains a contingency plan and actively takes steps to avoid the very real threat of foreclosure.
If you are a struggling homeowner, the most important thing to do is to recognize and accept the fact that you are facing problems in meeting your mortgage payments. If you act fast, there is a good chance that you may be able to save your home, your credit and your security.
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Things You'll Need
- Mortgage account information
- Personal financial information
- Business financial information (if applicable)
Instructions
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Do not ignore or avoid the problem. The best approach is to be proactive and contact your lender right away. Once the foreclosure process begins, fewer options will be available to you. Working with the lender before the foreclosure process is started may keep the loan out of default and may mean the difference between keeping your home and being forced to give it up.
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Speak directly to the Homeowner's Assistance or Loss Mitigation department of your lender company. These departments will be able to offer you options for keeping the loan out of default. Sometimes, these functions are outsourced to collection agencies. Don't be taken aback if you are routed to collections to discuss your options.
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Before the initial call, gather all the information possible about your current financial situation. Gather bank account balances, bills, credit card data and so on. In order to provide options, the lender needs as much information as possible. You may qualify for a hardship consideration.
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If there has been an illness or death in the family, be sure to include this information even if the financial impact was minimal. Lending agents are people, too, and they do understand that life happens. The emotional impact of family tragedy will likely influence a family's financial situation.
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Seek out all options available to you through the lender. For example, new 40-year mortgages may be considered for your case. Another option may be a deferment of payments. Yet a third may be a refinancing of the current loan. Banks and lenders are very motivated to assist you in these trying times. Ask about every single option available and how you might qualify for them.
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If you have problems working with the lender, the U.S. Department of Housing and Urban Development (HUD) provides counseling to distraught homeowners. Contact HUD at (800) 569-4287.
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Learn the steps involved in a foreclosure. Even when a property is in pre-foreclosure or in the foreclosure process, there are still options for the homeowner. The lender may work with the homeowner on a "short sale" or may offer options of returning the property to the lender with minimal penalty. A short sale is when the lending organization agreeing to accept a lower dollar amount on the property than the remaining amount of the loan. In other words, if the amount still owed to the bank or mortgage company is $100,000, the lender may agree to take $80,000 on a short sale provided the transaction takes place within 30 days. The point is that, in this distressed economy, lenders will work with you in many different ways to resolve issues and avoid foreclosure.
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Contact an attorney for information about more available options. An attorney will act as your advocate and will provide valuable support.
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References
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