Foreclosure Assistance Programs
Foreclosure is devastating, but it can be prevented by utilizing assistance. A variety of assistance programs are designed to provide aid to struggling homeowners. If you are facing foreclosure, contact your lender immediately. You should also remain in your home. Abandoning the property will disqualify you for certain assistance programs.
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Foreclosure Avoidance Counseling
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The U.S. Department of Housing and Urban Development certifies counselors across the nation to provide services to homeowners. The counselors will need your loan details to review your mortgage. Based on the loan, delinquent balance and monthly income, the counselor will determine suitable options. For some homeowners, it is as simple as prioritizing spending. For other homeowners, request a forbearance or repayment plan from the lender can prevent foreclosure. If you need assistance negotiating with the lender, a counselor can assist you.
Making Home Affordable
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The federal Making Home Affordable program strives to help homeowners avoid foreclosure through refinancing or modifying the loan. The program also offers a second-lien modification program for homeowners with a second mortgage. When saving your home is not an option, you can still keep the foreclosure from ruining your credit score. Foreclosure alternatives, including a deed in lieu of foreclosure and a short sale, allow the homeowner to give up ownership before the foreclosure occurs and even receive funds to help with the relocation.
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Hardest Hit Fund
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In 2010, President Barack Obama established the Hardest Hit Fund to provide assistance to homeowners in states most affected by the foreclosure crisis. States receiving assistance are Alabama, Arizona, California, Florida, Georgia, Illinois, Indiana, Kentucky, Michigan, Mississippi, Nevada, New Jersey, North Carolina, Ohio, Oregon, Rhode Island, South Carolina, Tennessee and Washington DC. Each state has its own assistance programs. For example, in California, the California Housing Finance Agency offers the Keep Your Home Program. Assistance is provided to unemployed homeowners and those experience a financial or medical hardship.
Foreclosure Mediation
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Some states have implemented mandatory foreclosure mediation programs. Connecticut, Florida, Nevada and New Jersey are some of the states with mandatory mediation requirements. The lender must offer the homeowner a chance to participate in a mediation program. Participation for the homeowner is voluntary. Through mediation, you have the opportunity to meet with the lender and an unaffiliated third party to explore options. You can discuss a modification, selling the home or a deed in lieu of foreclosure. Even if mediation is not mandatory in your state, you can still contact your lender to request mediation.
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