What is a homeowner supposed to do when the bank begins the foreclosure process? He doesn’t want to lose his house but he’s just isn’t sure how to avoid mortgage foreclosure. The following will offer some ways he can stop the process so he can retain ownership of his home.
Pittsfield, MA -- (SBWIRE) -- 02/04/2013 -- When a person’s financial fortunes take a bad turn, things happen that can get him into big fiscal trouble. He may fall behind on his bills, causing his creditors to hire collection companies. Worse, he might fall behind on his mortgage, which could result in him losing his home. If the homeowner does not know how to stop mortgage foreclosure, he may have no choice but to give his abode back to the lien holder and find a different place to live. Here are some steps he can take to avoid the whole uncomfortable mess and remain in his home. The minute a financial difficulty presents itself, contact the lender. Explain what’s going on and ask for help. Foreclosing on a borrower is very costly for the lien holder, so it is likely that he will make some suggestions that could lower the payment. For example, he may propose a loan modification. This means that some alterations will be made to the original mortgage loan, such as reducing the principal or extending the repayment period. Forbearance is another possibility. What this means is that a homeowner pays either a reduced amount or no amount whatsoever for a certain period of time. Lenders generally only do this when there is proof of an upcoming bonus or tax return.
There are other ways to avoid mortgage foreclosure. The federal government has a plan called HAMP (Home Affordable Modification Program) which offers different types of aid to struggling property owners. Besides loan modification, there is the possibility of refinancing the mortgage. This entails paying off the original loan and creating a new one that has better terms to help an individual make his monthly payments. There are eligibility requirements for the program, some of which are owing a specific amount on a single, four-unit property; having gotten the first mortgage on or prior to January 1, 2009; being able to prove that a financial hardship exists; and offering documentation that indicates an ability to handle the reduced payment. The property can be a rental property, but it must not be condemned, and the owner must not have been convicted of a felony in the past 10 years. HAMP helps the troubled homeowner by offering participating lenders hefty incentives to work with people in such a manner that foreclosure is no longer in the picture.
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