Blog

Are You Looking At Foreclosure Loans?

The time to start considering foreclosure loans, along with other other strategies, is the month you miss your first mortgage payment. Just like someone doesn’t head into the woods without first scouting out the area on a map, you too should have some good ideas of the map of a foreclosure proceeding, and this will include gathering information on foreclosure loans. Foreclosure is a lengthy process, and anytime before your house has actually been auctioned off you have time to find extra cash and negotiate a resolution to forestall foreclosure proceedings.

The Map of a Foreclosure

When you are more than 30 days late on your mortgage, this will start you down the path of a foreclosure. It’s still too early to get foreclosure loans even if you start checking into them now. However, you can potentially fend off getting in worse trouble simply by calling your lender. Once they are aware that you may need help modifying your loan, they can start to find ways to help you. They may offer a repayment plan or a loan modification plan. If you’ve only missed one or two mortgage payments, calling the lender and renegotiating the terms of your mortgage is the best thing to do at this stage. The worst thing to do is to ignore any correspondence or calls you get from your lender.

If a lender does not hear from you or they cannot work out something directly with you, then they will start legal proceedings. Now, it becomes even more expensive to bring the account current. You will not only be responsible for the missed payments and late fees, but also the costs your lender incurred whilst starting legal proceedings against you. Even so, it’s still a stage where contacting the lender, particularly if you’ve been coy in the past, would help to figure out where you stand and how much money you need to get into the lender’s hands to stop foreclosure proceedings.

Looking Into Foreclosure Loans

If you find that you can’t possibly get enough cash to satisfy the lender and the foreclosure proceedings are getting ominous, you still have the choice to look into foreclosure loans. These are private lenders who are willing to supply foreclosure loans for people who may not have other choices, either due to damaged credit or other circumstances. The loan to value ratio of the loan is usually only 65% or 75% of the total market value of the home. So, you must have significant equity in the home to even consider foreclosure loans. You will have to be careful for scams that end up taking the home out from under you, and you will need to be certain that you are working with a reputable lender.

How Does The Government Offer Mortgage Help In Times Of Crisis?

Author: Peter Gomes

President Obama’s ‘Making Home Affordable’ initiative is aimed at improving the real estate industry by providing mortgage help to 7-9 million borrowers. Under this initiative, the U.S. Government provides options for home owners to refinance their home loans with the help of Home Affordable Refinance Program and also modify them with the help of Home Affordable Modification Program.

What is Home Affordable Refinance Program (HARP)?

If you have a conforming home loan, you can obtain mortgage help and refinance into a more stable fixed rate loan under the HARP. The interest on the refinance loan will be based on market rates and you may have to pay the closing costs. This program will expire on 30th June, 2011.

Who can qualify for HARP?

You can refinance under this program if you meet the following qualifying criteria:

• You own and live in one- to four-unit home.
• The home loan is owned or guaranteed by Fannie Mae or Freddie Mac.
• You are current on your home loan payments.
• You have the capacity of paying the new loan payments.

You can also qualify for mortgage help under the program even if you have a second home loan provided the amount you owe on your first home loan does not exceed 125 % of the current market value of your property.

What is Home Affordable Modification Program (HAMP)?

The HAMP provides mortgage help to borrowers who are finding it difficult to make their monthly mortgage payments on time. So, if you are late on your home loan payments or may default soon, you can lower your payments with the help of HAMP. All the financial institutions that are sponsored by the Government must participate in this program and for other lenders, participation is voluntary. The program provides incentives to lenders to restructure your home loan and make it more affordable. HAMP will expire on December 31, 2012.

You can qualify for Home Affordable Modification Program if your mortgage has originated before Jan. 1, 2009 and your monthly home loan payment (including taxes and home owners insurance) exceeds 31 % of your gross monthly income. You do not have to bear any cost for modification of your home loan. For seeking any sort of mortgage help from the U.S. Government, you can visit financialstability.gov, their official web site. You can also seek information on the programs (free of cost) from your lender or a HUD-approved housing counselor.

Next Page »