Saving Your Home From Foreclosure


The day you signed the papers on your home was probably one of the best days of your life. How were you supposed to know that the economy was going to go down and stay down for as long as it has? When jobs are eliminated, and no new jobs form in their place, it can be pretty hard to figure out a way to pay the mortgage payments. Unfortunately, lenders don’t seem to understand that, and after only a few months of missed payments they are more than happy to start the legal process of removing you and your kids from your home.

You do have a few options. Unlike rental assistance, paying just a single month’s payment at this time will not really have much of an effect on the situation. Although your lender might accept your payment, it will probably not effect the foreclosure, so in a way it’s as if you’re wasting your money. Because of that, you will typically be told to get an agreement in writing about payments and their relationship to your foreclosure

Keep in mind that your state does not want you to lose your home. Everyone is aware that the recession has effected millions of people,and there are some options that exist to help you save your home. First, however, you need to speak to the bank that currently holds your mortgage. This may not be the same bank with whom you originally signed paperwork. Banks change as well, especially during recessions like the one we are finally beginning to recover from, and they may very well have sold or traded your mortgage over the years. If that happened, you should have gotten paperwork when your loan changed hands. If you can’t find it, try to call the bank that had it before, and they should be able to tell you who currently has your account.

When Your Bank Won’t Work With You

Each state may have some assistance available to help you win the battle for your home. To find out how you can expect your state to help you, visit this website: http://portal.hud.gov/portal/page/portal/HUD/topics/avoiding_foreclosure/local

Some states may have already ran out of funding, but they should be able to let you know when or if they will have more. Even if they can’t help you with the financial part of your mortgage, they may have some tips on how to deal with your lender.

Federal Programs

The federal government has several different programs available for people who are having a tough time making their payments. A comprehensive listing of programs can be found here: https://www.hmpadmin.com/portal/resources/overview.jsp

One that you may have already heard about is the Home Affordable Modification Program, or HAMP. This program helps anywhere from three to four million people each year. They work by adjusting the payments on mortgages, so that they are affordable both now and in the future. That means you are not likely to get a huge balloon payment in a few years, or to have payments that are not proportionate to your income.

For more information and find out how to apply, go here: https://www.hmpadmin.com/portal/programs/hamp.jsp

They may be able to help you by:

1) Reducing your interest rate significantly, sometimes to as low as only two percent
2) Increasing to amount of time that it will take you pay off your home, often to as long as 40 years
3) If necessary to ensure financing, they may also be able to defer part of the balance until your principal is paid for

In order to have a successful refinancing, you will need to be eligible. You may be eligible if you:

1) Are behind on your mortgage payments, or are in danger of defaulting on your mortgage in the near future
2) Occupy the residence as your primary residence ( so, if you rent this property out, you’re probably not going to be eligible)
3) Obtained this mortgage no later than January 1, 2009
4) Owe less than $729, 750 ( if this is a single unit property)

When You Can’t Afford That Really High Second Mortgage

Most people have really good reasons to take out the second mortgage, and virtually everyone thinks that making the payments will not be a problem. Unfortunately for so many of us, that may not always be the case. If you are struggling with the payments, or unable to make them at all, you probably should consider this program.

The Second Lien Modification Program exists in conjunction with the Home Affordable Modification Program. In order to be eligible, you must already be eligible for HAMP. Approximately one to one and a half million people are expected to benefit from this program each year. If you would like to apply, more information on this program can be found here: http://makinghomeaffordable.gov/lien_modification.html

When You Cannot Afford the Payments AT ALL Because You Can’t Find a Job

It’s one thing to not be able to make the payments on your home because you don’t ma enough. It’s quite another to have no source of income, or to be living off of unemployment, and therefore not able to make any payments at all.

You might be able to get help from the Emergency Homeowners Loan Program, also known as EHLP,if you live in one of the following areas:

1) Alaska
2) Arkansas
3) Colorado
4) Connecticut
5) Delaware
6) Hawaii
7) Idaho
8) Iowa
9) Kansas
10)Louisiana
11)Maine
12)Maryland
13)Massachusetts
14)Minnesota
15)Missouri
16)Montana
17)Nebraska
18)New Hampshire
19)New Mexico
20)New York
21)North Dakota
22)Oklahoma
23)Pennsylvania
24)Puerto Rico
25)South Dakota
26)Texas
27)Utah
28)Vermont
29)Virginia
30)Washington
31)West Virginia
32)Wisconsin
33)Wyoming

You are probably eligible for this kind of help, if you live in one of the above states, and you:

1) Are at least three months behind on your payments
2) Logically expect to be employed within two years with an ability to make the same size payments that you made previously
3) Made payments on time until you lost your job

Even if you think you are not eligible for any kind of loan, refinancing, or emergency assistance, you definitely want to look into your options. You might be pleasantly surprised! To apply or to get more information, visit http://makinghomeaffordable.gov/local.html