Stop Home Foreclosure Options
Tuesday, August 26th, 2008(3) Stop Home Forclosure Options
If you are facing foreclosure, you may believe your financial situation is hopeless, and there is nothing you can do to stop home foreclosure. Although, it may seem to be hopeless, there may be several ways you can stop the foreclosure on your home.
Depending on your personal situation, you may wish to consider the following options:
* Special Forebearance
* Mortgage Loan Modification
* Particial Claim
Stop Home Foreclosure - Special Forebearance:
With the Special Forebearance Option, your mortgage lender may be able to arrange a repayment plan based on your current financial situation.
Your mortgage lender may also provide a reduction of your monthly mortgage or even suspend the payment for a few months (adding on to the time to pay for the full mortgage).
Do You Qualify for Special Forebearance?
For qualification of special forebearance to stop home forclosure, you usually have to have recently experienced a reduction or loss of income (an injury, loss of job); or an increase in living expenses.
Many times the mortgage lender will require you to provide documents that prove your financial hardship situation, or you may also be required to write a Hardship Letter to Stop Foreclosure.
The mortgage lender may also request you provide documents that will prove you can make the new mortgage payment plan, if a new payment plan is setup.
Stop Home Foreclosure - Mortgage Loan Modification:
A mortgage loan modification to stop home foreclosure means you may be able to refinance your current mortgage and / or add years onto your mortgage loan term. Either of these options may lower your monthly mortgage payment so that it is more affordable to you.
Using a mortgage loan modification to stop home foreclosure may help you catch up on your bills by lowering the monthly payments to a more affordable level.
Do You Qualify for a Mortgage Loan Modification?
If you have recently recovered from a financial hardship like a loss of a job, have gotten a better paying job, etc., you may qualify for this stop home foreclosure option. It depends on whether you can now afford a new, yet possibly lower payment amount.
Stop Home Foreclosure - Partial Claim:
A partial claim may be available to you to stop home foreclosure. This means your mortgage lender may be able to apply for a one time payment from the FHA Insurance fund - HUD on your behalf. The payment amount will be the total required to bring your mortgage current.
Do You Qualify for a Partial Claim?
A partial claim to stop home forclosure may be available to you if your mortgage loan is at least 4 months past due, yet it cannot be more than 12 months past due.
You will also have to be able to now make the full monthly mortgage payments, and will have to provide financial documents for proof of income.
If your mortgage lender files a partial claim on your behalf, HUD — the U.S. Department of Housing and Urban Development — will pay your mortgage lender the amount required to bring your mortgage current.
You will also be required to sign a promissory note, and a Lien will be placed on your property until the promissory note is paid in full.
This promissory note to HUD is interest free, and is due when you pay off the first mortgage, or when you sell the property.
The above options are just three options that may be available for you to stop home foreclosure. You can learn about many more options if you visit Federal Reserve Board’s Foreclosure Resources.
