Foreclosure In The Near Future? STOP! Here are 6 Simple Solutions

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If your facing foreclosure soon please seek out help because there are many other options available that are easy and don’t require you to lose your precious credit score. Here are 6 simple ways.

A foreclosure happens when you are seriously delinquent on your mortgage payments, and the lender attempts to reclaim the property. If you or someone you know is facing a foreclosure in the near future, you should know that many options are available that help avoid losing your home, and most of them don’t hurt your credit! Most of these options are for FHA loans but some may be applicable to a VA or conventional loan.

1.First of all, do not prematurely move out of your home, or you may not qualify for assistance. Most lenders have a Loss Mitigation Department that can provide you with some options. Find out their contact information and provide them with your financial situation or any extenuating circumstances. You’d be surprised at how much a single phone call to your LMD can help.

2.You may also contact a HUD approved housing counseling agency by calling toll free (800) 569-4287. They will provide you with the nearest agency to you. These services are almost always free of charge and can be a very beneficial resource if you use them correctly. They provide you with a wealth of information ranging from government aid to local community organizations that can help you.

3.If you have recently experienced a reduced income or an increase in expenditures, you may quality for what’s called Special Forbearance. In most cases the lender can either provide you with a reduced payment plan or even a complete suspension of payments. You will however need to provide some kind of proof that you are experiencing financial hardships.

4.Your fourth option is what’s called a Partial Claim. What happens is the FHA-Insurance fun can bring your mortgage up to date by giving you a temporary interest free loan. You may only qualify for a Partial Claim if you are over 4 months delinquent but no longer than 1 year. You are also required to make full mortgage payments after the lien is placed and your payments are caught up. The amount of the partial claim is due either when you sell the home or the mortgage payments are completed. If you choose this option make sure that your financial hardships are over because you will be required to make full mortgage payments after the Partial Claim is in effect.

5.Your lender may sometimes provide you with a Mortgage Modification which allows you to refinance the amount of the debt or extend the timeline of your loan, which will reduce payments.

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6.As a last resort and after you’ve exhausted all other options above you may willingly give back the property to the bank. This is what’s called a Deed in-lieu of foreclosure. In most cases your credit will not be harmed, but you will lose the home. You may not pick this option if you have any other FHA loan in default.

As you can see there are many options available that are much better than giving your house up. Best of all, if done properly the options listed here will not hurt your credit!

If you’ve tried all the options above and need a quick way to get out of your home without ruining your credit please visit our Foreclosure site.

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Seven Ways to Stop Foreclosure

This article will teach you ways to stop foreclosure in order to keep your home. Following are seven ways to bring your loan current:

Reinstatement – Pay back everything owed, bringing the loan current. You cannot work out a payment plan. The entire amount must be paid in one lump sum.

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Repayment Plan – The lender allows you to work out a payment plan with them and you make payments that are larger than your usual monthly payment. The excess money goes towards the balance that you are behind. Most lenders will work out repayment plans of 3-6 months or 12-15 months if you need more time.

Forbearance – This program is for people whose financial problems are going to be for a short period of time. It allow for a smaller mortgage payment for a specific period of time. When this period is over, you are expected to bring the loan current with a reinstatement or repayment plan.

Loan Modification – This occurs when the lender changes the terms of the loan to bring it current. You can get a lower payment if you have had a reduction of income. It also allows you to move the money you are behind to the end of the loan. When you do this, you just make the regular monthly payment.

Partial Claim – If you have an FHA loan and fall behind on your payments, you may qualify for an interest-free loan from the government. This loan is used to bring your mortgage current. With this type of program, you do not have to make a monthly payment. You pay it off when you sell or refinance the property.

Refinance – There are many restrictions to getting a new loan. You become a greater risk to the lender as you fall further and further behind on your loan. Your monthly payment may be higher than the one you had before.

Bankruptcy – This should only be considered as a last resort because it can affect your credit for many years. A Chapter 7 bankruptcy only stops the process for 30-40 days. With a Chapter 13 bankruptcy, your lender may be forced to accept payments on the amount you are behind. You still have to make your regular monthly payment. Be sure to get qualified legal advice.

Most lenders do not want to foreclose on your home. They are not in the real estate business. They are in the business of lending money. It is very important to take action as soon as possible by contacting your lender and working out a program that best fits your situation.

Seven Ways to Stop Foreclosure
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Loan Modification Myths And Facts

Loan Modification has become the solution of choice for people facing unaffordable mortgages and foreclosure, but as the market for mortgage assistance grows, the number of misinformed homeowners is also rising steadily. A lot of people enter loan modifications with serious misconceptions, and end up making the wrong decisions, based on inaccurate information.

So how do you tell fact from fiction? Can a loan modification really stop foreclosure and solve all your mortgage problems? This guide shows you some of the most common myths about loan modification, and the truth behind them.

Myth #1: You can do it on your own.

Technically, you canbut it takes a lot more work and the results probably won’t be the same. Loss Mitigation is one of a bank’s busiest departments; a typical loss mitigation officer can handle as many as 800 cases at a time.

These people are over whelmed and do not have time to deal with your problem adequately. It’s not uncommon to be passed from one agent to another, and never get any real answers.

A loan modification attorney, on the other hand, can talk directly to your lender, and use significant leverage to get your file to the top of the agents’s stack. When a lawyer represents you, the calls get returned faster, you get more personalized service, and you gain the capability to actually obtain the type of loan you can need.

Myth #2: Your lender would rather foreclose than modify your loan.

In some cases, foreclosure is the more practical option. But according to a Tower Group study, lenders lose substantial money with every foreclosure, and are required to increase their reserves in addition. The banks already own too many foreclosure properties and have too many non-performing loans on their books. They would much prefer to adjust your mortgage to something affordable and convert your loan into a performing asset. Don’t be intimidated by threats of foreclosure.

Myth #3: You can’t stop the foreclosure process.

It’s true that your chances dwindle the longer you wait, but until your home is auctioned off, no one can really kick you out. A loan modification can stop the process as close as seven days before the sale date. This buys you enough time to get back on your feet while your lawyers work out a better arrangement with your lender. Of course, it’s always better if you take steps early on.

Myth #4: It’s an instant solution to mortgage problems.

Loan modifications really work, but they take time, the right expertise, and money. Depending on how far behind you are, the process can take anywhere from one to three months. But since it stops the foreclosure process, you won’t have to worry about losing your home while the modification is under way. If you submit your paperwork on time and cooperate with your lawyer, you can speed up the process and avoid complications.

Myth #5: You need good credit to qualify.

Standard requirements vary from lender to lender, but the bottom line is that the loan modification should make financial sense to your bank. Your credit rating doesn’t have anything to do with it. Your lender will want proof that falling behind was a temporary snag, and that you can afford to stay on track if they do modify your loan. This means you have to have a job and a valid proof of hardship. You don’t need to disclose your credit rating in most circumstances

Myth #6: Loan Modification companies are scams. Companies take your money, but don’t really do any thing.

In any business there are always some unscrupulous people, but you can find legitimate organizations that will help you. The important idea in loan modification is to work only with an experienced and knowledgeable law firm or attorney who has a track record of success. You should thoroughly check on the background of anyone who claims to be able to do a loan modification before you spend your money.

To get in touch with a good loan modification attorney you may call 800.738.1170 or visit http://www.cdloanmod.com

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By: Loan Modification Attorney

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The Loan Modification Department is composed of a team of attorneys, mortgage and real estate professionals, and hardship analysts.
For more information about Loan Modification go through the Loan Modification FAQs

Alternatives To Foreclosure: How Can I Avoid Foreclousre?

The thought of foreclosure is enough to send any homeowner into a panic. But contrary to belief, starting the foreclosure process does mean your at a dead end. From the day you receive your Notice of Default, you always have options, and the earlier you act, the easier it is to get back on track.

The two most common ways to stop foreclosure are a short sale and a loan modification. Both have their own pros and cons, and it’s important to choose the right path based on your situation depending on if you plan to keep or sell your home. This guide shows you both options and how they can help.

Option 1: Loan modification

The main advantage of loan modification is that you get to keep your home and continue your mortgage on more comfortable terms. It works by changing your mortgage terms to lower your monthly payments, allowing you to afford making your monthly payments again. This option is best for homeowners who have good payment habits but fell behind because of unavoidable hardship.

How it works

In a loan modification, you work with a lawyer who will basically guide you through the application. Your loan modification attorney will start by evaluating your case and deciding whether or not a mortgage modification will work for you. It’s important to talk to a good loan modification attorney who can completely understand your situation.

Once you’re qualified, they’ll ask for a few financial documents complete your negotiation package. These usually include proof of income (pay stubs, W2 forms, etc), bank statements, and a hardship letter explaining your request and how you fell behind. They’ll go over your documents to see if there are any legal violations (RESPA and TILA) that can be used as leverage.

After that, your application is submitted and your lawyer begins negotiations. This is the main part of the loan modification process. The wait time depends on how your bank responds and whether they make a reasonable offer. Your lawyer will keep negotiating until you reach the best loan modification agreement with your lender.

Finally, a loan modification offer is sent to you for approval. The change can be an extension of your loan term, a shift from adjustable to fixed rate, a lower interest rate, or a reduction of principal. It all depends on your situation and how well your lawyer can negotiate.

How to qualify

Anyone in financial trouble can qualify for a loan modification. However, each lender has its own standards, and you may want to check with yours to see if you’re eligible. In most cases, you’ll need at least a source of income and valid proof of your hardship. Examples of acceptable hardship include job loss, illness or death in the family, and military service. You’ll need to explain this in detail in your hardship letter so that your bank can fully understand your case.

They’ll also look into your financial documents to see if you can handle your loan once it’s modified. It’s best to have at least two months’ payment saved up by the time you’re approved, and an emergency fund to cover up in case you fall behind again.

Option 2: Short sale

A short sale is when you sell your home and your bank agrees to receive the proceeds, even if it’s less than the amount owed on the loan. The drawback is that you still lose your home, and your lender can give you a tight time frame in which to find a buyer. A short sale is still damaging to your credit, but it’s easier to clean up than a foreclosure which stays on record for up to ten years.

How it works

The short sale process starts when you contact your lender and make your proposal. You may want to contact a lawyer beforehand to help you talk to your lender, and help you map out your selling plan. Once your lender has agreed to the sale, you will issue a letter authorizing them to release information about your mortgage and property to investors or potential buyers.

The details are presented in a document called a settlement statement. This includes the proposed selling price, remaining balance on the mortgage, and all associated expenses such as commissions and closing costs.

As with a loan modification, you will also need a hardship letter explaining your situation and what kind of mortgage assistance you want. Your bank will verify your claims using standard financial documents, which you will also provide. When you’ve been properly assessed, your lender will contact a third party (usually a broker) to examine your home and verify its market value.

Once you find a buyer, the short sale takes place and the proceeds go to your lender. The rest of the loan is written off, so effectively you’re getting a discount. Note that the savings can be taxable. Check with a lawyer and accountant to see if there are any liabilities.

How to qualify

The requirements for a short sale can vary from lender to lender. Most of them have to do with your type of hardship and the market value of your home. Before applying, check your local listings to see if your home’s market value has dropped. It should be worth less than the balance you owe your lender. You should also have a valid hardship that can be verified in your financial documents.

By: The Loan Modification Department

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The Loan Modification Department is composed of a team of attorneys, mortgage and real estate professionals, and hardship analysts. Our lead attorney is Christian M. Dillon, an experienced lawyer specializing in loan modifications and RESPA and TILA violation cases.
For a Free consultation talk to our Loan Modification Lawyer or go through the Loan Modification FAQs