US Homeowners have been haunted with the threat of foreclosure in unprecedented numbers over the past decade. Millions upon million of homeowners have lost their home due to foreclosure. Millions of these foreclosures could have been prevented by one or many of the home loan solutions listed on this mortgage help resource.
I urge homeowners who currently find themselves at risk of falling victim to foreclosure to not give up hope. There is help and there is a way to stop foreclosure where there is a will to find it.
Methods to Stop Foreclosure
You will need to write a mortgage hardship letter to work with your lender.
Loan Modification – This is most likely the best all-around solution for a homeowner who needs to lower their mortgage payment and stop foreclosure. Also called a mortgage modification or restructured mortgage, the loan modification is an agreement used to alter home loan variables such as the interest rate, term, type (variable/fixed), principle, etc. Homeowners interested in this type of mortgage workout should research the Obama loan modification program known as HAMP – the Home Affordable Mortgage Program. HAMP has helped millions of homeowners and it will lower your monthly payment if you are able to obtain a modified loan agreement through this program.
Deed in Lieu – This agreement allows the homeowner to simply hand over the deed or ownership of the house in recognition of the looming forced sale of the home that would inevitably take place in a foreclosure.
Simple Repayment Plan – If a homeowner experiences only a short term hardship then an agreement to repay the lender for what is past due may be a good solution and an alternative to foreclosing on the home.
Government Mortgage Relief – Homeowners who have been plagued by financial hardship and as a result is in desperate need of mortgage help should explore the many homeowner assistance programs created by the government to help homeowners stop foreclosure and make a home affordable.
Short Sale – This foreclosure solution allows a homeowner to stop foreclosure but not retain home ownership. Thus this option should only be sought by those who can simply not afford to keep the home. The short sale allows the homeowner to sell the house for less than the loan balance owed. Thus the benefit to the homeowner is that they are able to avoid foreclosure and the excess principle that was owed over the actual sales price the home sold for in the short sale.
Mortgage Refinance – This is the best possible option for any homeowner in foreclosure that is able to do so. There are maybe government sponsored programs that allow underwater homeowners to refinance out of what may be an undesirable mortgage into a lower interest loan more suitable for the long term ownership of the house. The Obama refinance or HARP program is one option and the more recent high loan to value government refinance help for those with Fannie and Freddie backed mortgage loans is also a great option for homeowners who would like to refinance a high-interest mortgage for a lower interest fixed rate mortgage. Should I refinance?
Forbearance Agreement – This allows homeowners who are passed to on their mortgage but can pay back what is owed to make an agreement to pay all past due sums over time and bet back on track with the original loan arrangement.
Foreclosure Prevention Specialist – Hiring a loss mitigation specialist may allow you to stop foreclosure and work out a mortgage solution that allows you to keep your home. Read this resource on the foreclosure prevention industry first!
Hard Money Loan (Bridge Loan) – This is a high-interest loan that allows a homeowner time to find better financing. It is dangerous however because the high-interest loan will lead to yet another foreclosure and threat to lose the home.
Bankruptcy – Filing bankruptcy will stop foreclosure.
Repay the Loan – By repaying the entire loan the foreclosure process will be stopped