Can't afford your home? Letting the bank foreclose is not your best course of action!
There is a tendency for people in financial straits to ignore their problem until it is too late. Don't sit back and do nothing when there are options out there that will do much less damage to your credit and might even allow you to keep your home. If you simply let the bank take your home without trying a workout alternative, you may not be eligible for a new Fannie Mae-backed mortgage for seven years from the date of foreclosure.
Not enough has been written about the Home Affordable Modification Program (HAMP
) and the Home Affordable...
What is HAMP and can it help me modify the loan on my Los Angeles Home?
If you can no longer afford to make your monthly loan payments, it is possible that you can qualify for a HAMP loan modification
to make your monthly mortgage payment more affordable. HAMP
stands for Home Affordable Modification Program
and it offers eligible borrowers the opportunity to modify their loan to lower their monthly mortgage payment to 31 percent of their verified gross (pre-tax) income to make their payments more affordable. If you are currently having difficulty making your payments, even if you have missed one or more payments, you may be eligible for the Making Home Affordable HAMP
To be eligible for HAMP
, the following four items must apply to you:
- Own a one- to four-unit home that is your primary residence
- Have received your mortgage on or before January 1, 2009;...
Yes, HAFA, or Home Affordable Foreclosure Alternatives, could be a benefit to you.
HAFA was designed to help homeowners avoid foreclosure by allowing them to "sell short" or sign a Deed in Lieu of Foreclosure.
According to MakingHomeAffordable.gov
, the first benefit
is that either of these options will have a lesser impact on your credit scores than will a foreclosure.
A Deed in Lieu simply allows you to transfer title back to the bank without going through the foreclosure process. This is generally only allowed if you have no second mortgage.
The second major benefit
to HAFA is the avoidance of any possible deficiency...
…get started on a short sale now.
When payments are overdue it can be tempting to simply wait it out and live payment-free for a few months until the bank gets around to foreclosing. However, that's a poor idea in terms of your financial future.
Three very good reasons to avoid foreclosure and take steps toward a short sale today:
1. Credit, and your ability to purchase another home
A foreclosure will stay on your credit report for ten long years. And even if everything else on your report is good, and you're able to raise your credit scores, you won't be eligible for a new mortgage loan for 5 to 7 years.
After a short sale, you'll be able to purchase another home in as little as 2 or 3 years.
2. Your financial liability for a deficiency after a foreclosure
If you happen to have a second mortgage or a home equity line of credit, the second lien holder can and probably will sue you for a deficiency*...