Mortgage foreclosure rates continue to rise in spite of President Obama's mortgage relief plan. Anticipated mortgage foreclosure statistics project an additional 9 million homeowner's will lose their homes to foreclosure by 2012.
The increase in mortgage foreclosure rates originated with predatory lending practices. Many borrowers obtained 'no money down' subprime loans. When the banking crisis occurred and real estate prices fell, many borrowers were left owing more on their home mortgage loan than the appraised property value.
A second mortgage crisis occurred due to skyrocketing unemployment rates. As millions of Americans were left without a job, they were faced with the decision of whether to pay their mortgage loan or place food on the table. Many who enter into mortgage default turn to bankruptcy in attempt to avoid foreclosure.
Obama's mortgage relief plan offers incentives to lenders to help borrowers prevent foreclosure through loan modifications. In order to obtain a modified loan agreement, borrowers must possess the financial means to pay future mortgage payments.
If borrowers are unemployed or do not have ability to continue paying home loan payments lenders can grant borrowers short sale approval. A short sale means lenders agree to accept less than is owed on the home loan. Borrowers must submit financial documentation and a short sale hardship letter to the bank's loss mitigation department.
Another form of mortgage foreclosure help is deed in lieu of foreclosure. Deed in lieu means the lender takes possession of the home and the borrower walks away. Two types of short sale and deed in lieu contracts exist.
The first is payment in full without pursuit of judgment. When lenders engage in payment in full contracts they accept the short sale purchase amount or return of real property as satisfaction of payment for the mortgage note.
The second is known as deficiency judgment; meaning borrowers are held responsible for the difference between the sale price and loan balance. Deficiency judgments can amount to several thousand dollars and remain on credit reports until paid in full.
Borrowers who wish to obtain short sale approval or deed in lieu should work with a qualified foreclosure attorney. Home foreclosure is a complicated matter that few people can negotiate without legal assistance.
The U.S. Department of Housing and Urban Development (HUD) website offers valuable mortgage foreclosure information and resources. HUD offers low- and no-cost housing counseling services throughout the country. By calling 1-800-569-4287, borrowers can obtain advice on mortgage default, foreclosure, and buying or renting a home.
Additionally, our mortgage foreclosure article library contains hundreds of informative articles. Topics include mortgage foreclosure help, how to avoid foreclosure, deed in lieu of foreclosure, tips for improving chances of obtaining short sale approval, and much more.
I buy houses from borrowers facing mortgage foreclosure. I am particularly interested in distressed properties located in Orange County and southern California, Washington, Arizona and Nevada. If you have real estate for sale in these locations contact me using the "we buy houses" form.
Published on January 01, 2010 at 02:05 AM
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