Working with Your Mortgage Company to Stop Your Foreclosure
Sooner is better than later. The longer the time frame in which nothing has been attempted or discussed with the note holder, the less likely they are to be cooperative.
Call and get the name of the person handling your loan, get a direct number if you can. It can be daunting to communicate with these sometimes large organizations that do not have to return a call if they don't want to.
Follow every phone call with a written letter or fax that restates your conversation that day, who said what and your understanding of what was said. They have a habit of not remembering and of seemingly not being interested.
Here is what you need when you talk to them:
You want a faxed or mail statement showing the net pay off of your loan
on a date prior to the foreclosure sale date and at the same time
you want to know what the reinstatement costs are.
The reinstatement costs are all of the unpaid mortgage payments now due and owing, along with penalties, attorneys fees and any lender supplied insurance or tax payments.
These 2 figures will help you decide what steps to take next.
All mortgages have the right to reinstate by paying the arrearages. There are many ways to find the money to make those back payments. For example:
1.
Sell some of your assets:
an old car, collectibles, etc...
2.
Borrow against your IRA, or 401K:
you can take the money out and use it for 60 days without a penalty
3.
Borrow from your family
If none of these sources or other sources of cash are available to you, talk to your lender about the following programs:
1.
FHA loan program called "partial claim":
FHA provides interest free loans to bring the mortgage current, it must be repaid at the same time and results in an increased monthly payment, but it also stops the foreclosure process.
2.
Forbearance program:
restructures the loan, they may move the past due payments and late fees to the end of the note and give you a 30-60 day grace period to get back on track
3.
Loan Modification:
the note holder reduces the interest rate or changes the length of the term in the note there by lowering the payments
4.
Work-out plan or repayment plan:
as it is called by some lenders is where part of the past due payments are added to the loan or to a new payment established with an up front lump sum that is less than the total arrears.
5.
Deed in Lieu of Foreclosure:
last resort after talking to banks, lawyers, and real estate agents. It only saves the bank money on foreclosing, it has the same strong negative effect on your credit history, but it protects you in the event of a loss suffered by the bank in the reselling of the property
6.
VA compromise program or FHA "pre-foreclosure sale program" or a conventional loan program called "short sale":
All require you to be working with a licensed realtor. You get 90 days to sell the property at FMV or under market as in a "short sale" the lender has final authorization on terms and the seller leaves the table with out any proceeds if a short sale is worked out, no second liens are paid. You must request the package from the lenders " loss mitigation dept. Package includes information you must provide like closing costs, Fair market value statement from a real estate broker, hard ship letter, financial statement, signed purchase agreement.
|
