Helping Neighbors In Need - Foreclosure Alternatives

After considering the impact of foreclosure on a borrower’s finances, it’s fortunate that there are alternatives to foreclosure available to most homeowners. First and foremost, lenders will (almost) always agree to cease foreclosure proceedings and reinstate the loan at anytime prior to the foreclosure auction IF the homeowner is able to bring the mortgage payments current. Most will even consider removing late fees and penalties.

Refinancing

If you see foreclosure in your future but are still current with your lender, you may be able to refinance with lower interest rates, or a longer term, to lower your monthly payments. If you are a senior, you may even be able to secure a “reverse” mortgage that does not require you to make any future payments at all. See the “REFINANCING” tab for more information.

Many lenders are offering their customers loan modifications to reduce their monthly payments. This written agreement between the Homeowner and the loan servicer can be temporary, or permanent, and can alter one or more of the terms of the original agreement. Common types of loan modifications are: rate reduction, capitalization, term extension, and one-time assumption. See the “LOAN MODIFICATION” tab for more information.

Loan Modification

Forbearance

Some lenders are refraining from legal action when the mortgagor misses payments and offering arrangements to eliminate the arrearages. Called “forbearance,” this process is most often used when the mortgagor was temporarily unable to make payments (due to loss of work or illness), but is able to sustain payments in the future. See the “FORBEARANCE” tab for more information.

Short Sale

Sometimes referred to as a “Pre-Foreclosure Sale” – this entails the Homeowner selling the home at current market value and requesting the lender to accept the proceeds as full payment for the loan. This is referred to as a “short sale” because the sales price typically falls “short” of the loan balance owed by the borrower. See the “SHORT SALE” tab for more information.

Deed in Lieu

Bankruptcy

Sometimes used as a last resort to stop a foreclosure, bankruptcy is a federal legal process designed to help consumers and businesses eliminate their debts or repay them under the protection of the bankruptcy court. See the “BANKRUPTCY” tab for more information on how bankruptcy affects foreclosures.

If you would like to speak with a Helping Neighbors in Need counselor

concerning your specific situation,

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Assistance is free and all discussions are held in strict confidence.