Last Minute Foreclosure Help
Since the foreclosure process varies in each state, there is no average length of time for a home foreclosure. In most states, a sale date is scheduled shortly before the home is foreclosed. Homeowners who are currently several months behind on their mortgage payments can utilize last minute assistance to save their homes from foreclosure.
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Home Affordable Modification Program
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The Home Affordable Modification Program (HAMP) is part of the federal Making Home Affordable program established by President Obama in 2009. If you are at least three months behind on your mortgage, you may be eligible for a loan modification. A loan modification is a permanent foreclosure solution that lowers your interest rate, extends the length of the loan and/or reduces the principal. The goal is to bring your mortgage payment, including taxes and insurance, below 31 percent of your gross monthly income. Homeowners must also suffer a financial or medical hardship and prove the ability to make the proposed mortgage payment. The loan must also be acquired prior to January 1, 2009. If you need assistance determining your eligibility, you can locate a nonprofit housing counselor through the HUD website (see Resources).
Emergency Homeowners' Loan Program
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The reinstatement period allows the homeowner a final opportunity to stop the foreclosure sale by paying the past-due debt, along with any associated fees. In most states, the reinstatement period is five days before the scheduled auction date. For homeowners who possess the ability to resume making their mortgage payments but are short on cash, the Emergency Homeowners' Loan Program may help. The program awards an interest-free loan of up to $50,000 to homeowners who are unemployed or suffering a hardship. The loan can be applied toward a delinquent balance or used to cover 24 months of payments while seeking employment or furthering education. For each year the mortgage is paid on time, 20 percent of the emergency loan is forgiven.
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Mediation
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Mediation allows you and the lender a chance to meet face-to-face to discuss all possible solutions. A neutral third-party conducts the mediation session to ensure both sides are able to convey their interests. Although the mediator can suggest creative and innovative options, he cannot take sides or offer legal advice. Some states, including Florida and New Jersey, have mandatory mediation laws for all foreclosure cases. In other states, you will need to contact your lender to discuss participation in mediation.
Home Affordable Foreclosure Alternatives
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If you are unable to keep your home, consider exiting gracefully. The Home Affordable Foreclosure Alternatives Program rewards homeowners who complete a short sale or deed in lieu of foreclosure. Homeowners can receive up to $3,000 to relocate. Both alternatives have a less severe credit impact than a foreclosure. To sell the home in a short sale, the lender must agree to accept less than what you owe. If the home does not sell after 90 days on the market, you can ask the lender to consider a deed in lieu of foreclosure. The deed in lieu allows you to sign ownership rights back to the lender, releasing your liability.
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