Solutions to Foreclosures in Virginia
Virginia homeowners facing foreclosure need to explore various solutions to avoid the negative consequences associated with foreclosure. In Virginia, the foreclosure process does not take long. A home can be foreclosed in as little as 45 days. This is why it is important to contact your lender and seek help as soon as you begin having difficulty making your mortgage payment.
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Counseling
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Virginia homeowners can benefit from the help of foreclosure prevention counselors who offer guidance, information and helpful resources for fighting foreclosure. HUD-certified counseling agencies throughout Virginia provide counseling services at little or no cost to you. Prepare to supply your financial and mortgage information to the counselor for review so he can discuss solutions. A range of options are available to homeowners, such as refinancing, modifying the loan or selling the home. The counselor can help you apply for assistance and negotiate with the lender.
Loan Modification
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The Home Affordable Modification Program allows Virginia homeowners to modify their loans by adjusting one or more terms for the duration of the loan. This can involve interest rate or principle balance reductions or extension of the length of the loan. To qualify for the loan, your current mortgage along with tax and insurance must exceed 31 percent of your gross monthly income. The home must be your primary residence and must have been acquired before January 1, 2009. You must also suffer a hardship resulting in a loss of income. Contact your lender to apply for the program.
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Short Sale
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If you are unable to afford the home and not eligible for a modification, consider selling the home through a short sale keeping in mind that the lender is not obligated to agree to this. Selling the home allows you to avoid a deficiency judgment. In some cases, you can even receive relocation funds for a graceful exit. The Home Affordable Foreclosure Alternative program provides up to $3,000 to assist homeowners with the cost of moving into another home. To receive the funds, your Virginia lender must participate in the program. If the home does not sell after 90 days on the market, you can inquire about a deed in lieu of foreclosure. Through a deed in lieu of foreclosure, you voluntarily transfer ownership rights back to the lender.
Bankruptcy
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Federal law allows homeowners to file bankruptcy to delay or prevent foreclosure. If you file either Chapter 7 or Chapter 13 bankruptcy, an automatic stay will be issued by the court prohibiting your lender from proceeding with the foreclosure. Although you cannot keep your home in Chapter 7 bankruptcy, you can utilize the time to save for alternate housing. Chapter 13 bankruptcy allows you to maintain your home, provided you are able to resume paying. Since lenders require you to pay the delinquent balance to avoid foreclosure, Chapter 13 helps by allowing you to make monthly payments on the arrears. Your monthly expenses can be lowered by eliminating unsecured debt, such as a second mortgage. Before filing, consult an attorney. If you cannot afford an attorney, seek free or low cost services through legal aid organizations such as the Virginia Legal Aid Society which provides assistance statewide.
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