Have you recently lost your job or a major source of income involuntarily? Are your mortgage payments in arrears or do you think you will fall behind with your mortgage payments soon? Are your Option ARM or Alt A ARM getting ready to modify? Have your mortgage payments recently increased? If so, there may be solutions from your loan company to help you stop foreclosure that you are not aware of.
Mortgage loan workouts are mortgage options centered around preventing you from losing your house to foreclosure. There are several different ways that mortgage loan companies provide mortgage workouts to their clients.
Solutions To Prevent Home Foreclosure
- Deferment – Deferment is a settlement that your mortgage lender makes with you to allow you to make part of your mortgage payment at a later date. Basically, the mortgage loan company will make your [current payment smaller] by some amount and add that amount onto your principal that you will have to remit at a later date. This is a good option to halt foreclosure if you have some temporary loss in salary that has been resolved or will be in a short period of time and you just need some temporary relief.Student loans, which are normally deferred until sometime after the student graduates from college, are similar to this type of workout. In the same way, a mortgage can be deferred.
- Repayment Agreement or Forbearance Plan – Your mortgage lender might offer you a forbearance plan if your mortgage is behind due to some short term reduction in income that is now settled. Repayment agreements allow for the delinquent money that you owe from missing a few mortgage payments to be paid over a series of monthly payments. During the forbearance plan your mortgage payment will go up temporarily until the past due money that you owe is paid back. Once the money is paid back that you owe, your mortgage payment will return to its normal level.
- Partial Claim or Second Lien Mortgage – In this mortgage workout, another loan that you may or may not have to make payments on is taken out for the amount of the past due money that you owe. Once you are able to refinance or sell your property, this type of mortgage will have to be paid back.
Options If You Want To Move
Foreclosure on your home can be prevented by the following options.
- First, there is the short sale. A short sale is when you get your mortgage company to agree to let you sell your home for less than what you owe on it. If you plan to sell your home for less than you owe, you will have to get your mortgage company to agree, since they have a lien on your home. This process will take some time so get started early if you plan on selling your home.
- A Deed In Lieu of Foreclosure is the second option. A Deed In Lieu Of Foreclosure is where you would transfer legal custody, or title, of your property to your mortgage lender in exchange for the debt that you owe them. If you do give them legal ownership of your property you will want to make sure that they completely erase your loan. Making loan payments on a house you no longer own or live in is the last thing you want.
Get Help To Prevent Foreclosure
Your best option to prevent foreclosure is to get the help of your mortgage company. The faster you contact them and ask for their assistance the better off you’ll be. Putting in the effort to work out a good faith solution will make them more willing to work with you. Good luck.
