Foreclosure Options in Texas
Homeowners facing foreclosure in Texas have options. Foreclosure will have a significant negative impact on your credit score. A foreclosure can also prevent you from renting an apartment or home in the future. Contact your lender when you being having trouble making your mortgage payment to explore your foreclosure prevention options.
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Counseling
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Texas homeowners often benefit from taking to a foreclosure prevention counselor. A counselor will need basic information regarding your mortgage and finances to discuss the best solution to avoid foreclosure. Counselors are also able to speak with the lender on your behalf. Texas counseling agencies can be located by contacting the Texas Foreclosure Prevention Task Force or through the HUD website (see Resource section). Services are offered to homeowners at little or no cost.
Making Home Affordable Program
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President Obama implemented the Making Home Affordable program to help reduce the number of foreclosures. Texas homeowners can take advantage of the aid by refinancing at a lower interest rate or modifying the loan. In a declining housing market, refinancing through your lender is often difficult because the home does not appraise as high as the loan balance. The Making Home Affordable program helps homeowners who are up-to-date on the loan, regardless of the appraised value. If you have already fallen behind, a loan modification can allow the lender to adjust the terms of the loan and reinstate the mortgage.
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Home Affordable Foreclosure Alternatives Program
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Through the Home Affordable Foreclosure Alternatives Program, homeowners can opt to sell the home through a short sale or give up ownership rights through a deed in lieu of foreclosure in exchange for relocation funds. A homeowner can receive up to $3,000 toward relocation expenses through the program.
Bankruptcy
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Texas bankruptcy law provides temporary foreclosure relief to homeowners. When either Chapter 7 or Chapter 13 bankruptcy is filed, an automatic stay is issued until the bankruptcy is finalized. For homeowners who would like a fresh start, Chapter 7 bankruptcy is usually the best route. Although you cannot keep the home, you can delay the foreclosure. If you can afford your current mortgage payment, Chapter 13 places you on a repayment plan to allow you to avoid losing the home. Bankruptcy will have a negative effect on your credit report for at least seven years.
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