Sep 20, 2008 3:12 am US/Eastern
Fast Facts: How To Get Forclosure Help
MIAMI (CBS4) ―
If you know you don't have the immediate funds to pay your mortgage, foreclosure may not be your only solution. Many lenders would rather help you find a way to stay in your home rather than take it, force your eviction, and then be left with a property which could be difficult to sell in a tough real estate market.
If you are not able to make arrangements which will allow you to keep your home, there are other programs lenders may offer which will allow you to avoid the financial damage a foreclosure will cause.
Here are opportunities some lenders offer. Contact your lender to find out which options they offer and which could apply in your situation.
FIND OTHER PAYMENT METHODSIf your checking or savings accounts are insufficient to pay your mortgage, you may be able to repay your home loan using:
Your 401(k) account—ask your employer about making a "hardship withdrawal".
--Selling stocks and/or bonds
--Cash in life insurance policies.While these options may seem harsh, the effects of a foreclosure on your finances and credit can be dire. Before you use any of these other sources to pay your home loan, please make sure you understand any penalties or tax issues that may result.
REQUEST A REPAYMENT PLANIf you have missed one or more home loan payments, lenders might consider creating a repayment plan that spreads out the past due amount over several months. Each month, you would pay your regular monthly payment amount plus part of the amount you are behind, until you catch up.
This works best if you had a temporary problem but now have the income to meet your mortgage, and just need help with past due amounts. With a repayment plan you may be able to:
--Repay the past due amount over time.
--Postpone foreclosureMODIFY YOUR LOANContact your lender and ask if they would be willing to change the term of your loan. This could mean a change in interest rate, a change in the repayment time, or other modifications.
A lender could:
--Reduce your interest rate, so your monthly payments are lower.
--Extend your loan term Payments would be smaller, but you'd pay back over a greater time.
--Add your past due amount to your outstanding loan balance
--Offer a combination of optionsSEEK 'FORBEARANCE'In this situation, a lender would postpone a pending foreclosure, let you temporarily make smaller payments, and in during that time attempt to come up with a long term solution.
Lenders may offer this under certain circumstances, such as an attempt to sell your home, lateness caused by temporary hardship, or other situations.
You may be able to receive:
--A short time with no payments or reduced payments
--A short-term postponement of a foreclosure sale
SHORT SALEDepending on your situation, selling your home may be the best option. We may be able to accommodate a "short sale", where you pay off most of your home loan.
Even if you owe more than your house is currently worth, a short sale may enable you to:
--Control the timing and details of your home sale.
--Control the timing and details of moving from your home.DEED-IN-LIEUWith a "deed-in-lieu of foreclosure", borrowers turn over ownership of their house to their lender. Your house must be free of leins, other loans, or judgments. With a deed-in-lieu of foreclosure you may be able to:
--Avoid additional foreclosure charges.
--Arrange your move-out date.No matter what you do, it's important not to wait until the foreclosure process has moved so far along you have no time to explore other options. Contact your lender early and seek help.
If your lender is unable or unwilling to help, legal assistance might be in order. It's always good advice to consult a lawyer before making a major decision that will affect something as important as your home.
In South Florida,
Legal Aid offices can help people in financial need without the ability to pay for a lawyer. Please understand the mortgage crisis has left them often overwhelmed.
(© MMIX, CBS Broadcasting Inc. All Rights Reserved.)
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