Jan 2, 2009 3:44 pm US/Eastern
Fast Facts: How To Get Foreclosure Help
PHILADELPHIA (CBS 3) ―
If you know you don't have the immediate funds to pay your mortgage, foreclosure
may not be your only solution. Many lenders would rather help you find a way to
stay in your home rather than take it, force your eviction, and then be left
with a property which could be difficult to sell in a tough real estate
market.
If you are not able to make arrangements which will allow you to
keep your home, there are other programs lenders may offer which will allow you
to avoid the financial damage a foreclosure will cause.
Here are
opportunities some lenders offer. Contact your lender to find out which options
they offer and which could apply in your situation.
FIND OTHER
PAYMENT METHODS
If your checking or savings accounts are
insufficient to pay your mortgage, you may be able to repay your home loan
using:
Your 401(k) account—ask your employer about making a "hardship
withdrawal".
--Selling stocks and/or bonds
--Cash in life
insurance policies.
While these options may seem harsh, the
effects of a foreclosure on your finances and credit can be dire. Before you use
any of these other sources to pay your home loan, please make sure you
understand any penalties or tax issues that may result.
REQUEST A
REPAYMENT PLAN
If you have missed one or more home loan
payments, lenders might consider creating a repayment plan that spreads out the
past due amount over several months. Each month, you would pay your regular
monthly payment amount plus part of the amount you are behind, until you catch
up.
This works best if you had a temporary problem but now have the
income to meet your mortgage, and just need help with past due amounts. With a
repayment plan you may be able to:
--Repay the past due amount
over time.
--Postpone foreclosure
MODIFY YOUR
LOAN
Contact your lender and ask if they would be willing to
change the term of your loan. This could mean a change in interest rate, a
change in the repayment time, or other modifications.
A lender
could:
--Reduce your interest rate, so your monthly payments are
lower.
--Extend your loan term Payments would be smaller, but you'd pay back
over a greater time.
--Add your past due amount to your outstanding loan
balance
--Offer a combination of options
SEEK
'FORBEARANCE'
In this situation, a lender would postpone a
pending foreclosure, let you temporarily make smaller payments, and in during
that time attempt to come up with a long term solution.
Lenders may offer
this under certain circumstances, such as an attempt to sell your home, lateness
caused by temporary hardship, or other situations.
You may be able to
receive:
--A short time with no payments or reduced
payments
--A short-term postponement of a foreclosure sale
SHORT SALE
Depending on your
situation, selling your home may be the best option. We may be able to
accommodate a "short sale", where you pay off most of your home
loan.
Even if you owe more than your house is currently worth, a short
sale may enable you to:
--Control the timing and details of your
home sale.
--Control the timing and details of moving from your
home.
DEED-IN-LIEU
With a "deed-in-lieu
of foreclosure", borrowers turn over ownership of their house to their lender.
Your house must be free of leins, other loans, or judgments. With a deed-in-lieu
of foreclosure you may be able to:
--Avoid additional foreclosure
charges.
--Arrange your move-out date.
No matter what you do,
it's important not to wait until the foreclosure process has moved so far along
you have no time to explore other options. Contact your lender early and seek
help.
If your lender is unable or unwilling to help, legal assistance
might be in order. It's always good advice to consult a lawyer before making a
major decision that will affect something as important as your home.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
Click to enlarge
Stumble It!
Comments