| According to RealtyTrac's
website there have been over 2 million foreclosures in 2007. The top
three foreclosure states are California, Texas and Florida.
According to the Mortgage Bankers Association, 1 out of every 200
homes will be foreclosed.
If you are facing foreclosure, put away those credit cards and stop
charging. Put yourself on a spending plan immediately. Contact your
lender's litigation or foreclosure department to inform them you are
having a financial hardship. Monitor your finances until your other
debts are paid off so you don't get into the same situation in the
future. Confirm the agreement with your lender in writing. Be sure
to consult a tax advisor to determine rules regarding foreclosure.
Don't be discouraged, there are several ways you can save your home.
Here are 6 tips to assist you when facing foreclosure:
1. Short Sale. You can sell your house for less than what you
currently owe on your loan. Your home does not have to go into
foreclosure, you don't have to file bankruptcy and the filing
process is much faster. The lender saves money without having to
file foreclosure proceedings, but does lose money by not getting the
full price of the home during the sale. The buyer gets the house at
a reduced price.
2. Partial Claim. Your lender may be able to work with you to obtain
an interest-free loan from the Housing and Urban Development agency
to bring your mortgage current if you qualify. Visit the HUD website
or call 800-CALL-FHA for more information.
3. Special Forbearance. A lender can arrange a repayment plan based
on your current financial situation or may provide a temporary
reduction or suspension of your mortgage payments. You may qualify
for this if you've recently experienced a reduction in income or an
increase in living expenses. You may have to provide proof of your
current financial situation.
4. Deed-in-lieu of foreclosure. You may be able to voluntarily
"give" your home back to your lender. This may help your chances of
getting another mortgage loan in the future.
5. Mortgage Modification. You may be able to refinance the amount
owed and extend the term of your mortgage loan for the missed
payments. You may qualify if you've recovered from a financial
hardship and your net income is less than it was before you
defaulted on the loan.
6. Pre-Foreclosure Sale. You can sell your property and pay off your
mortgage loan to avoid foreclosure and damage to your credit rating.
If you know you cannot afford to afford to make the payments you may
sell the house yourself before the foreclosure sale date and save
some of your equity. Contact a Realtor and tax advisor for rules
regarding pre-foreclosure sales.
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