Most of us run into money problems at some point in our lives, and have to try some creative financing. If you own your home, and are in a tough situation, you may be at risk for losing your house through foreclosure. If you find yourself in this kind of trouble, the good news is, there are some ways to hold onto your home.
Foreclosure is what happens if you can no longer meet the payment schedule on your home loan. The lending institution repossesses your home and sells it to someone else. There are three options that you should know about. The first one is to try to keep it. The second is to sell it yourself; using the money to repay the loan and any extra fees you’ve accrued. The third option is to let the lender proceed with the foreclosure. It will then be your responsibility to pay any difference between the price they got and what you owe.
One thing to take very seriously is NEVER ignore a letter you receive from your mortgage holder. They will start sending them once you get behind in your house payments. Call the person who sent the letter and give them a detailed explanation of your circumstances. They certainly don’t want to be burdened with your home, anymore than you want to lose it. It’s hard work for them, costly, and not something they really want to take on. Most of the time they will be willing to work with you to find a solution.
There is something called a Special Forbearance that may be available to you. It can allow you to make lower or even no payments for a period of time. This is generally an option if you become unemployed, lose part of your income, or have incurred an unusual increase in your living expenses.
Mortgage Modification is another possibility. It’s a program that lets you refinance your whole loan or lengthen its term. It can go a long way in helping you get caught up. Your lender may also let you make a Partial Claim. Under its terms, they will help you take out a no interest loan from the Housing and Urban Development (HUD) Department, giving you the opportunity to bring your mortgage current.
Remember, if you fall behind, rather than worry about foreclosure, talk to your mortgage company to see what programs you would qualify for so you can stay in your home. Never ignore the problem, because you likely have several viable options to fix your foreclosure problem.
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