Friday, June 2, 2023

Foreclosure – How to Avoid This Ugly Word

For landlords, foreclosure is an ugly word that should be avoided at all costs. But when it comes to financial problems, it is another dilemma that must be faced bravely and wisely. But do you know that this can be avoided? Here are some tips how.

apply for mortgage modification program

Most homeowners get stuck in mortgage payments because of the high monthly payments. Through mortgage modification programs, these monthly payments can be reduced by as much as $1,000 or more to give the loan a more stable structure.

The government created several mortgage modifications to help homeowners avoid foreclosure. One program is called the Home Affordable Modification Program (HAMP). This program lowers monthly mortgage payments by up to 31% of homeowners’ pre-tax monthly gross income.

There are also underwater mortgage programs that homeowners experiencing declining home values ​​can obtain.

Apply for Unemployment Assistance Programs

Sometimes, unemployment becomes the main reason why monthly mortgages become unviable. Job loss can happen at any time. In addition, there are special programs for homeowners who suddenly become unemployed while paying off the home mortgage. There is a program allowing for lower mortgage payments or up to 12 months of moratorium. During those months, should the owner become employed again the mortgage will be repaid at standard rates.

Contact the lender and explore foreclosure avoidance options

The value of communication should not be overstated during foreclosure problems. Lenders also have several programs or options to offer in order not to be led into foreclosure. Lenders usually favor these options because foreclosure means they will have to bear higher costs. Remember that having a foreclosed home on their stables means they will have to pay maintenance fees and taxes until the property is purchased from them.

arrange a managed exit

If foreclosure is truly inevitable, opt for a managed exit such as redemption. This option is available to the owner for a certain period of time after the home is sold at the foreclosure sale. With this, the owner becomes eligible to buy back the house and become its rightful owner again. However, this option requires the owner to pay back the outstanding mortgage balance accrued at the time the home was placed in foreclosure.

Foreclosure is an ugly word, but there are things that can be done to prevent it from happening. The above tips should serve as a guide. For other assistance, your local real estate agent is always a call away!

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