What are my alternatives if I am facing foreclosure?
So, you haven't made your mortgage payment this month. Maybe you haven't made it for the last couple of months. Times are getting tough and your financial situation is making you nervous. You don't want to lose your home and you certainly don't want to deal with foreclosure. You've heard about a short sale but that's still selling your home. What are your alternatives if you don't want to get rid of your home?
There are variety of loan modifications that can be made between you and your lender. One of them is mortgage modification.
Mortgage modification is a negotiation between you and your lender to revise terms on your mortgage loan and keep you in the home. Most lenders want you to keep your home so they're willing to work with you and negotiate a strategy for you paying off your mortgage in a different way. Typically the terms of your mortgage will be modified outside the original terms of the contract to make it easier for you to make those payments. The types of modification may include a reduction in your interest rate or a reduction in the principal itself. Lenders may eliminate late fees and other penalties and lengthen the long term. They may cap the monthly payment to a percentage of your household income or put you on a mortgage forbearance program.
Another option may just be to refinance your home. Your lender may agree that your interest rate is too high and by lowering it with the refinance program will allow you to skip a payment during that time. This may give you ample time to make up the difference and save for lower mortgage payment.
There is also the HAMP (home affordable modification program) which is a federal program set up to help eligible homeowners with loan modifications on their mortgage debt. It is the answer for the ongoing subprime mortgage crisis that was rampant in the mid-2000s. This allows several lenders, investors, and mortgage servicers to create a standard loan modification guideline when evaluating a borrower for potential loan modification.
As a possible final option you could choose bankruptcy but owning a home and claiming bankruptcy can be tricky. The best thing to do in this case would be to enlist the help of a foreclosure and mortgage mediation group such as the Advantage Legal Group in Bellevue Washington. They've helped thousands of Western Washington homeowners either keep their home or get out of debt with dignity.
There are options if you want to stay in your home but you have to act right away if you have missed a mortgage payment. The longer you wait the less likely it will be for you to keep your home.