Home foreclosure continues to plague Americans, with one of every 385 homeowners receiving notice of default in 2009. By now, everyone knows that Wall Street, subprime lending practices, and skyrocketing unemployment has clouded the American Dream of homeownership. The question remains, is there an end in sight?
Mortgage financiers and government agencies publish conflicting home foreclosure information. Some sources claim bank foreclosures are lessening, while others report the number of foreclosure properties will continue to rise through 2010.
As a private real estate investor, I believe foreclosure rates will increase throughout the year and begin to level out by 2011. Although President Obama's "Home Affordability and Stability Plan" offers resources to help homeowners avoid foreclosure, many lenders are not actively pursuing these options for their customers.
Many homeowners possess home mortgage loans with adjustable-rate mortgages. Presently, low interest rates allow vulnerable borrowers to obtain reduced monthly payments. However, when interest rates rise these homeowners can quickly become another foreclosure statistic.
Individuals who require home foreclosure help should begin by contacting their lender. When borrowers become delinquent on their home mortgage loan their account is turned over to the bank's loss mitigation department. Loss mitigators can help homeowners determine which strategies are available to help avoid foreclosure.
Options can range from obtaining a loan modification through mortgage refinancing or by temporarily reducing or suspending mortgage payments. Borrowers with FHA loans might qualify for interest and payment-free financing to get their loan current. Borrowers facing short-term financial crisis might qualify for a mortgage forbearance agreement or short refinance.
In order to save your home from foreclosure it is imperative to become proactive. If you do not obtain satisfactory results from your lender, consider hiring a freelance loss mitigator or real estate attorney to negotiate on your behalf.
The home foreclosure process typically takes several months to complete. Borrowers have multiple opportunities to stop the process, but not all will qualify for home foreclosure help. If you can no longer afford mortgage payments, talk to your lender about entering into a short sale agreement or obtaining a deed in lieu of foreclosure.
Short sale real estate agreements can be tricky to negotiate. In essence, borrowers must convince lenders to accept less than is owed on the mortgage note. Oftentimes, this amount is several thousand dollars because property values have substantially decreased in recent years and many borrowers owe more than their house is worth.
The majority of lenders require borrowers to have a buyer in place prior to granting short sale approval. Borrowers must obtain authorization from their lender before listing property through a realtor.
Deed in lieu of foreclosure does not allow borrowers to remain in their home, but does offer financial relief. Deed in lieu is often referred to as voluntary foreclosure because borrowers return the house to the bank.
Two types of deed in lieu and short sale agreements exist. The first is referred to as Payment in Full, which means the lender accepts the short sale price or returned property as satisfaction of payment. The second is known as Deficiency Judgment and requires borrowers to pay the difference between the loan balance and sale price of the foreclosed property.
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Published on February 09, 2010 at 02:00 AM
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