Monday, September 29, 2008

What to do if you're facing foreclosure

Are you falling behind on mortgage payments? Has your loan been referred to an attorney? Are you receiving lots of junk mail, offering to buy your house? You must act fast to avoid losing your home. The most important step you can take is to start returning phone calls, asking for help from your mortgage lender, servicer, or housing counselor.

Most folks stop answering their phones or opening their mail. You have to become pro-active. Delaying and falling further behind will result in fewer options.

Your mortgage lender doesn't want to foreclose so by finding a solution that avoids foreclosure will be better for you and better for them. Foreclosure destroys your credit and will greatly reduce your ability to borrow money or buy another home in the future.

It is important to be open and honest about your financial situation with your lender or serviceing company. Here are the steps to take to prevent foreclosure:

· Call your lender or loan servicer and discuss your situation; The contact information will be on your monthly mortgage statement or coupon book.

· If you can't reach your lender or servicer or you do not receive help; Call Homeownership Preservation Foundation at 1-888-995-HOPE. Their experienced counselors can help you develop the best plan for your personal financial situation. This is a free service.

· Gather the information you will need. You will be asked to provide:

All correspondence from your lender,including any foreclosure notices
Mortgage statements showing your loan number
Your homeowner's insurance policy
Last two years of tax return for all borrowers named on the mortgage
Pay stubs or unemployment compensation verification
Proof of any other types of income, including child support, alimony, Social Security, or pension
Bank account statements
List of all monthly bills

· Understand all your options: Dependent on your situation, you may have several options which could include the following;

Back end add on; All missed payments are added onto the back side of your original loan. This option is the least desirable as these amounts accumualte interest at a higher interest rate.

Repayment Plan; Your lender may allow you to repay this amount over the remaining period of your loan.

Advance; Mortgage's owned by Fannie Mae may allow you to make an unsecured personal loan through a company such as HomeSaver Advance TM if your missed payments are due to a temporary financial hardship, contact your servicer.

Modification; In some rare cases, mortgage loan terms can be changed on a temporary or permanent basis to make the payment more affordable.

· Avoid foreclosure rescue scams; If there is any kind of fee associated with getting help, stay clear of it. Foreclosure scams will take advantage of your situation.

If your financial situation has changed significantly since you qualified for your home due to unemployment, divorce, job change/relocation, or medical issues, You may just need to sell your home as a result of the changes. Contacting a Realtor is your first step in getting your house sold and/or purchasing a more affordable home.

Pre-foreclosure or Short Sale Specialists work with borrowers to sell the home and use the proceeds to pay off the loan even if the proceeds are not enough to settle the entire balance. They normally will assist you in getting the mortgager to accept a lower price

As you can see there are a number of options available to the home owner who is facing possible foreclosure, but you have to act now and get your head out of the sand. Today the lenders, servicers and mortgage holders understand there are lots of homeowners in trouble and they want to help you prevent foreclosure.

Contact The H Team today to receive your free copy of Preventing Foreclosure.

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