Have you recently lost your job or a major source of income involuntarily? Are your mortgage payments behind or do you think you will fall behind with your mortgage payments in the near future? Do you have an Option ARM or an Alt A ARM that is getting ready to modify? Have your mortgage payments recently gone up? If so there may be solutions to help you prevent foreclosure from your lender that you are not aware of.
Mortgage Solutions centered around preventing you from losing your home to foreclosure are called mortgage loan workouts. Mortgage lenders provide mortgage workouts to their customers in a variety of ways.
Solutions To Prevent Home Foreclosure
- Deferment – Deferment is an agreement that your mortgage lender makes with you to allow you to make part of your mortgage payment at a later date. Basically, the mortgage lender will reduce your current payment by some amount and tack that amount onto your principal that you will have to pay at a later date. This is a great solution to prevent foreclosure if you have some temporary reduction in income that has been resolved or will be resolved in a short period of time and you just need some temporary relief.
Often, student loans are deferred until sometime after a college student graduates from college before they have to start paying on their loans. A mortgage can work in the same fashion.
- Repayment Agreement or Forbearance Plan – If you have gotten behind on your mortgage due to some temporary reduction in your income that has been resolved then your mortgage lender might offer you a Forbearance Plan. Repayment agreements allow for the delinquent money that you owe from missing a few mortgage payments to be paid over a series of monthly payments. During the forbearance plan your mortgage payment will go up temporarily until the past due money that you owe is paid back. Once the money is paid back that you owe your mortgage payment will return to its normal level.
- Partial Claim or Second Lien Mortgage – This solution to prevent foreclosure puts the money that you owe that is past due into another mortgage that you may or may not have to make payments on based on your financial situation. This loan will have to be paid back once you are able to refinance or sell your property.
Options If You Want To Move
Several solutions exist that can help you prevent a foreclosure on your home. This first is called a short sale. A short sale is when you get your mortgage company to agree to let you sell your home for less than what you owe on it. Since your mortgage company has a lien on your home they will have to agree in advance before you sell your home if you plan to sell if for less than what you owe. This process will take some time so get started early if you plan on selling your home. Read more on Short Sales
The second option you may have for preventing foreclosure is to conduct a Deed In Lieu Of Foreclosure. A Deed In Lieu Of Foreclosure is where you would transfer legal custody, or title, of your home to your mortgage lender in exchange for the debt that you owe them. You will want to make sure that they completely forgive your debt if you hand them legal ownership of your home. The last thing you want is to have to still make mortgage payments on a home that you no longer own or live in.
How To Get Started To Prevent Foreclosure?
Best advice – Call your mortgage company to get their help to prevent foreclosure. The quicker you are to calling and requesting their help the better off you’ll be. If you make a good faith effort to work out a solution they will be more likely to work with you. Good Luck.
