Homeowners who are at risk of foreclosure have many options to avoid foreclosure and ultimately protect their credit status. There are several avenues to explore before foreclosing on your home: you can work out an agreement with your lender, seek government assistance, or file for bankruptcy. One of the key steps in preventing foreclosure is communicating with your lender about alternative arrangements for handling the debt incurred on the home.
Contact your mortgage lender. You might think it is preferable to wait to inform your mortgage lender that you are having difficulty paying your mortgage. But notifying your lender immediately when you cannot make a payment- preferably before you are delinquent in payments- is the best option for both you and the lender. The lender is generally motivated to try to avoid foreclosing on your home as well.
Explore alternative payment arrangements. In some cases, the lender will accept an alternative financing arrangement particularly if you have not yet missed any payments. This can vary widely among lenders and the type of loan that is at issue. If the lender is willing to negotiate, it may accept partial payments of the mortgage for a specified period of time with the promise that you will repay the full amount at a later date. The lender may also agree to halt payments for a stated period of time. This is referred to as forbearance. Typically a lender agrees to this arrangement if you can provide some evidence of impending cash flow. Alternatively the lender might agree to revamp the terms of the loan to make it easier for the borrower to make future payments. This is referred to as loan modification and can include increasing the duration of the loan term or converting the loan to a different rate. Loan modification is a viable option when the borrower can demonstrate that he is now in a position to afford the altered payment structure.
Seek government assistance. If you have a loan insured by the Federal Housing Administration (FHA), then you have additional options if you are facing foreclosure. Your lender can assist you in obtaining financial help from the FHA Insurance fund by reducing your monthly mortgage payment through a partial claim and a loan modification. A partial claim consists of an interest free loan that is not required to be repaid until the mortgage is satisfied.
The experienced team of attorneys at the Law Offices of Mark Weinstein, P.C. can help you litigate your real estate claims. Contact Mark Weinstein and his colleagues at (770) 888-7707 or visit them at http://www.markweinsteinlaw.com to find out how they can advise you.