Avoid Foreclosure Through These
Two New Government Programs:

1. Hope for Homeowners Program
Q&As

2. Hope Now Program
Details

The Four Most Common Ways to
Get Your Home Out of Foreclosure

See Below on How to Avoid Foreclosure and
How to Work Yourself out of Foreclosure with Your Lender

Reinstatement as a way out of foreclosure

This is the fastest and easiest way to get your loan current. To get your loan caught up immediately, just pay the amount that is past due. That’s easily said, huh? However, you may be incurring a large amount of fees, back payments, late penalties and possibly legal costs of the lender. Often, if you can promise a bulk payment to bring your loans current, your lender may reinstate you.

Repayment Plan as a way out of foreclosure

A very common way to resolve a loan that is behind in payments is to work out a repayment plan. In these, you COULD be allowed to pay part of the deliquency monthly, along with your regular payment. Most people who realized a short term financial problem that caused them to be in trouble, can negotiate with their lender on this. Often, the lender is asked to allocate your payments that are in arrears over a time period, often 18-24 months, depending on your situation.

In this plan, lenders often ask for twenty-five to fifty percent of the past due amount down, and the rest to be caught up over some months. Here, you have to prove with financial documents that you CAN now make the payments, because they will be HIGHER, consisting of the amount you pay  for catching up, plus the regular payment that you were making before.

Loan Modifications or Loan Restructuring
....... as a way out of foreclosure

If you can make your regular payment,  but haven't enough income to cover paying the past-due amount,  you can ask your lender to fold past-due  sums , including interest, penalties, escrow, etc. into the principal that you owe. Then the new amount is re-amortized over a different time frame. 

You can also ask your lender to extend your loan over a longer period, fixing the monthly loan total at a level that you can afford. A modification rewrites your existing note and brings your account current immediately.

Loan Forbearance as a way out of foreclosure.

You may be eligible for Forbearance, which will give you time to gather your assets. Forbearance lets you put off or reduce payments for a short period, and then at the end of that period, a different option starts to bring your account current. If your lender agrees, he will temporarily stop legal activity.

if you know you can come up with the funds to bring your account up to date by a specific date, your lenders be willing to combine your forbearance plan with a reinstatement plan, or with a repayment plan.

If you have just had a sudden decrease in income or upswing in expenses, this may work well for you. You need to get with your lender to tell him why you had this hardship and then he may give you the time you need to overcome the sudden situation and financially recover yourself.

Other Options as a way out of foreclosure.

HUD Approved Housing Counseling Agencies

Click here to learn about Partial Claim

If you cannot keep your home,
here are other options:

• Pre-foreclosure sale or short payoff: If you can't sell the property for the full amount of the loan, your lender may accept less than the amount owed. Financial help may also be available to pay other lien holders and/or help towards some moving costs. You may qualify if:

• The loan is at least 2 months delinquent
• You (or your real estate professional) can sell the house within 3 to 5 months
• A new appraisal (obtained by your lender) shows that the value of  your home meets HUD program guidelines

• Sale: If you can no longer afford your home, your lender will usually give you a specific amount of time to find a purchaser and pay off the total amount owed. You will be expected to use the services of a real estate professional who can aggressively market the property.
• Pre-foreclosure sale or short payoff (Short Sale): If you can't sell the property for the full amount of the loan, your lender may accept less than the amount owed. Financial help may also be available to pay other lien holders and/or help towards some moving costs. You may qualify if:
  • The loan is at least 2 months delinquent
  • You (or your real estate professional) can sell the house within 3 to 5 months
  • A new appraisal (obtained by your lender) shows that the value of your home meets HUD program guidelines
• Assumption: A qualified buyer may be allowed to take over your mortgage, even if your original loan documents state that it is non-assumable.
• Deed-in-lieu of foreclosure: As a last resort, you "give back" your property and the debt is forgiven. This will not save your house, but it is less damaging to your credit rating. This option might sound like the easiest way out, but it has limitations:
  • You usually have to try to sell the home for its fair market value for at least 90 days before the lender will consider this option
  • This option may not be available if you have other liens, suc h as other creditor judgments, second mortgages, and IRS or state tax liens

There are many other ways, some very creative, of successfully negotiating with your lender. Our advice is to contact a loan modification professional.

For help in finding a foreclosure/mortgage restructuring expert in the Orange County area, contact me for my suggestions as to where you can get help in avoiding foreclosure on your home in Orange County, California.