July 20, 2024


Creative meets living

Foreclosure – How to Avoid This Ugly Word

Foreclosure – How to Avoid This Ugly Word

To homeowners, foreclosure is one ugly word which must be avoided at all costs. But when financial problems come, it is another dilemma which must be faced bravely and wisely. But do you know that it can be avoided? Here are some tips how.

Apply for mortgage modification program

Most homeowners get trapped into mortgage payments because of the high monthly dues. Through mortgage modification programs, these monthly payments can be significantly reduced to as high as $1000 or more giving the loan a more stable structure.

The government designed several mortgage modifications to help homeowners avoid foreclosure. One program is called Home Affordable Modification Program (HAMP). This program lowers monthly mortgage payments to as much as 31% of the homeowners pre-taxed monthly gross income.

There are also underwater mortgage programs which homeowners who experienced decline in home values can obtain.

Apply for unemployed assistance programs

Sometimes, unemployment becomes the main root why monthly mortgages become unsettled. Loss of work can strike anytime. With this, there are special programs for homeowners who suddenly become unemployed while still paying for the home mortgages. There is a program allowing for up to 12 months of either reduced mortgage payments or suspension. During those months, the owner should find re-employment as the mortgages will be reverted to norma rates.

Contact and seek foreclosure avoidance options from lender

The value of communication should not be scraped off during foreclosure problems. Lenders also have numerous programs or options to offer so as not to lead on foreclosures. The lenders usually favor these options because foreclosures means they have to shoulder more costs. Remember that having a foreclosed home in their stables mean they have to pay for maintenance fees and taxes until such time that the property is bought from them.

Have a managed exit arranged

If foreclosure is truly unavoidable, then opt for a managed exit such as redemption. This option is available to the owner for certain period after the house is sold on a foreclosure sale. With this, the owner becomes eligible to buy back the house and be its rightful owner again. This option, however, requires the owner to pay the outstanding mortgage balance accrued at the time the house was put into foreclosure.

Foreclosure is an ugly word, but some things can be done to prevent it from happening. The tips above should serve as guide. For other assistance, your local real estate agent is always a call away!