Avoiding Foreclosure
If you need foreclosure help, taking an active role early
plays a major role in avoiding foreclosure. We’ll show you
a few potential ways to stop foreclosure before it's too late.
Homeowners who have trouble making mortgage payments in a timely manner may be subject to seizure
and the loss of title of their home. For these often well-intentioned individuals, unforeseen circumstances
such as job insecurity or medical issues have them facing the unfathomable—home foreclosure.
Regardless of the circumstances, it should and can often be avoided, with a little effort.

If you're unable to make your mortgage payment, it's absolutely critical that you call your lender now, in
order to stop foreclosure. Ignoring the bills will only make matters worse, increasing the likelihood that
you'll lose your home for sure. Borrowers who seek foreclosure help early are much more likely to work
out a solution, no matter how dire their situation. Mortgage companies want to avoid foreclosure as much
as you; they're much more interested in the money they make off your interest, rather than the money
they'll lose on your home foreclosure. Based on your situation, your lender may be able to provide the
foreclosure help that you need.

Problems making your mortgage payment?
Here are a few options for individuals who can't make their mortgage payments or may have short-term
financial problems and want to
avoid foreclosure:

Forbearance
A temporary agreement that delays payments for a short period of time. Mortgage lenders will
only allow forbearance if you can prove you'll eventually acquire funds. Some common examples  
would be a tax refund or a bonus where you can show future earnings that can bring your
mortgage up-to-date.

Reinstatement
If you're behind on your mortgage payments, a reinstatement can take place when you make a
lump sum payment by a specified date, bringing your account back to current status. Lenders often   
combine reinstatement with forbearance.

Repayment Plan
If you're behind on your payments, the mortgage company may give you
a fixed amount of time to catch up, by combining a portion of your past
due amounts with your regular payments, allowing you to get current.

Loan Modification
The terms of your loan can be adjusted. Changing the amortization table
or lowering your interest rate can make a big difference, reducing your
monthly payment amount to something you can afford.

Federal Foreclosure Help
In response to the recent mortgage crisis, the president has announced a
refinancing program called FHASecure. This new product offered through the
Federal Housing Administration (FHA) is estimated to help some 240,000
homeowners prevent foreclosure. This is rather notable, as the FHA's previous
policy would not allow for refinancing of borrowers in default. It does, however,
come with restrictions; you must meet the following criteria to qualify:

1)   You must have a history of on-time mortgage payments and a decent
credit history to qualify.
2)   Your interest rates must have or will reset between June 2005 and
December 2009.
3)   You must have 3 percent cash or equity in your home.
4)   You must have a sustained history of employment.
5)   You must have sufficient income to make your mortgage payments.

The primary purpose of FHASecure is to provide help to the well-meaning
borrowers who may have been lured into costly loans featuring teaser rates,
and may be facing mortgage foreclosure. You can find more information on
the FHASecure plan at
http://www.fha.gov.

Severe Problems?
A few options for individuals dealing with severe financial circumstances or
can no longer afford their mortgage payments and want to stop home
foreclosure:

Short Sale
A short sale deal between the homeowner and lender to sell the property for less than it's worth, with the
mortgage lender taking the loss.

Pre-foreclosure sale
A pre foreclosure sale is an effective way of stopping foreclosure, allowing a default homeowner to
satisfy his mortgage obligation by selling the property in question for an amount less than owed. You
may qualify if:

1)   The loan is at least 2 months delinquent,
2)   You are able to sell your house within 3 to 5 months, based on what your lender agrees         
upon;
3)   A new (lender obtained) appraisal meets HUD value requirements.

Deed-in-lieu of foreclosure
This last resort allows you to "give back" your property to the lender. This will leave a mark on your
credit record, but it will stop foreclosure, which is much more severe.

Credit Counseling
A non-profit credit counseling agency may be able to help you prevent a real estate foreclosure. Be
especially leery of fee-based groups approaching you with bank foreclosure solutions. They'll often
recommend (at a cost) what we've covered above, most of which you can do on your own or with the
assistance of a HUD-approved counseling agency. You may find a HUD-approved housing counselor
online or by calling (800) 569-4287 or TDD (800) 877-8339.

Taking a pro-active approach to home foreclosure avoidance can't be stressed enough. If you lose your
home to foreclosure, the lender may come after you to recover money owed that may not have been
recuperated in the property foreclosure sale. Having a house foreclosure on your
credit report is
detrimental and ranks right up there with
bankruptcy. Remember that as negative as things may seem,
your current financial problems are most likely temporary. Avoid foreclosure now so that when you get
back on your feet, you won't be restricted by looming credit issues.
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Avoiding Foreclosure