Ways to Save Your Home
If you are determined to stay in your home, these options are available to you to help you achieve that outcome. These solutions are available to owner occupied AS WELL AS investor properties, except where noted.
OFTEN OVER- LOOKED, but important to mention is debt restructuring. Reallocating your cash towards your mortgage instead of other bills. Often times, you can call utility companies, health care providers and hospitals and work out a way to pay them less per month, and opt to pay a smaller amount on your credit cards.
Now, for other solutions available to you...
- EXPERIENCED A TEMPORARY REDUCTION IN INCOME OR INCREASE IN LIVING EXPENSES (IE: birth of a child,short term disability, pay decrease, leave of absence)
- Used with a re- payment plan, for- bearance will
allow you to repay the past due amount over a specified period of time. (Usually only a few months of delay is permitted).
- You may be able to eliminate or or
reduce your mortgage payments for a short period of time. Thereafter, the bank would
review your new financial situation to determine what long term solution
would best assist you in bringing your loan current.
- A forbearance
plan is ONLY a short term solution for borrowers who occupy their property as their primary residence. If you are
unemployed you can send a copy of your unemployment benefit/award letter to
your bank for consideration.
- Forbearance and repayment
plans will not not change your interest rate, are not permanent, and the original terms of your
mortgage still apply. This is a temporary means to help you get into a better position where you will be able to once again pay on your loan with the original payments or while
you wait for a real loan modification.
- WOULD LIKE TO BRING YOUR MORTGAGE CURRENT WITH AN INTEREST FREE LOAN
- A Partial Claim is an interest free loan from
HUD that is subordinate to your mortgage loan and is evidenced by a HUD Partial
Claim promissory note. The HUD Partial Claim funds are used to bring you
mortgage loan current. The HUD Partial Claim promissory note is only due at the
time you sell, transfer or abandon your property, you pay off your mortgage
loan, or your mortgage loan matures.
- STILL HAVE INCOME BUT WANT TO REFI- NANCE TO A LOAN WITH A LOWER PAYMENT
You MAY be able to do a STOP FORECLOSURE LOAN and refinance to better terms before or during the foreclosure process, but know that not all companies do this. Freddie and Fannie have a program that will allow you to refinance UP TO 125% of the current appraised value of your home, so if you have a Freddie or Fannie loan, you should call your bank to see if they have this program available, or search for a lender or broker who can assist with this. (I have 2 I can recommend)
- HAVE AN ATTORNEY OR OTHER COMPANY CHECK THE LEGALITY OF THE VERBIAGE IN YOUR LOAN DOCUMENTS.
This option may cost some money (a legitimate company should NOT CHARGE UPFRONT!), but if you find a REPUTABLE company, it may be a VERY promising solution. HOWEVER, please see the IMPORTANT DISCLOSURES section to assure you avoid fraud!
- HAVE SOME OF YOUR DEBT FORGIVEN AND REFINANCE THE REST
This an available options banks don't like you to know about. This option does involve the forgiveness of debt and may have tax consequences, so it is advisable to contact a CPA to discuss how this type of workout would affect your taxes.
- HAVE SOME MONEY BUT CAN'T PAYBACK IN THE SHORT TERM, BUT ARE ABLE TO IN THE LONG TERM
A long term repayment schedule will allow you to repay your delinquencies over more than a year of time, unlike forbearance and their repayment plans. To qualify for this, however, you will need to come up with a portion of the amount you are behind. Check with your bank's mortgage modification or to a mortgage hardship specialist to determine if this is something you would qualify for.
- WANT TO ELIMINATE A SECOND MORTGAGE
If your property value has dropped and you have a second mortgage, there is a way to strip the lien of the second, but it does require you to file Chapter 13 bankruptcy (There are several different types of bankruptcy) Please note that a bankruptcy WILL stay on your credit for the next 7 to 10 years, but if you plan on remaining in your home for 7 to10 years, this may be a good option for you.
- WANT TO STAY IN YOUR HOME AND HAVE YOUR DEBT RESTRUCTURED FOR A FRESH START.
can file bankruptcy and it will save your home, but, if, after
bankruptcy you fail to make the agreed upon payments, you still will lose
your home to foreclosure.
- WOULD LIKE TO LOWER YOUR MONTHLY PAYMENTS MORE LONG TERM
- A loan modi- fication is actually a way to lower your payment by changing your original mortgage terms for a temporary time frame. A loan modification can either reduce your interest rate, your principal, or create a longer loan term, thus giving you a more affordable payment, which could help you avoid foreclosure. YOU DO NOT HAVE TO BE BEHIND IN PAYMENTS TO START A LOAN MODIFICATION! Usually, you can only apply for a modification if you are in dange or missing payments or if you already have. There are several types of loan modifications, for both owner occupied homes and investment properties:
Affordable Mortgage Program (HAMP):
(Only owner occupied homes/Conforming loan amounts) HAMP is sponsored by the federal government under President Obama's Homeowner Affordability and Stability Plan. Eligibility for this is only available if you LIVE in the home you plan to use HAMP with, and usually is not for JUMBO loans. Your bank will be able to assess whether you are eligible to take advantage of the HAMP program. You can goto their website or call them to begin an evaluation.IMPORTANT: IF YOU CALL YOUR BANK, VS GOING ONLINE, YOU NEED TO TALK TO A FORECLOSURE PREVENTION SPECIALIST. Too often, people speak to the WRONG people at the bank and get nowhere!
Loan Modification (non-HAMP):
(Non Owner Occupied/Jumbo loan amounts) Investors who do not live in their property or jumbo loan holder also have this option available to them. If you did not qualify for HAMP, you may qualify for a traditional loan modification. may be available for you if you do not occupy the subject property as
your primary residence or you have otherwise determined that you do not qualify
for consideration under HAMP.
FHA Modification: (FHA Insured mortgages ONLY)This loan modification option is only available to a borrower with an
FHA-insured mortgage and who is currently delinquent by three (3) or more
FHA HAMP Loan Modification:(FHA Insured mortgages only) An FHA HAMP loan
modification allows a combination of a loan modification with a HUD Partial Claim.
The HUD Partial Claim is used to bring the loan current and to reduce the principal balance on your mortgage loan, so there is less of a balance to incur interest on. This combination will
in turn reduce your monthly payment.
If you do not qualify for forbearance, a loan
modification, do not want to ruin your credit with a foreclosure or bankruptcy, you may be eligible for a Liquidation Option (CLICK HERE) that avoids foreclosure. |