Freddie Mac Foreclosures
Homeowners facing Freddie Mac foreclosures ought to become familiar with programs that can help keep their house or exit gracefully. There are several programs that offer foreclosure assistance, but it's important to become proactive at the first sign of financial distress.
The first step to avoid Freddie Mac foreclosures is to get in touch with your lender. You will have access to more options by opening the line of communication with the bank. Options include refinance, mortgage forbearance, reinstatement, repayment plan, and loan modification.
It's important to become educated about the pros and cons of each option. Homeowners can obtain free housing counseling through community agencies approved by HUD. Housing counselors can review your situation to determine which programs you might qualify for.
Counseling is available in person and by phone. To locate local HUD housing counseling agencies call the U.S. Department of Housing and Urban Development at 800-569-4287.
Homeowners with Freddie Mac loans might qualify for alternative programs offered through Making Home Affordable. Homeowners that don't qualify for mortgage refinance might be eligible through Home Affordable Refinance Program (HARP).
Qualified homeowners can obtain reduced monthly payments that let them stay in their home. Not all lenders participate in Home Affordable programs, so the first step is to talk with your lender.
In situations where homeowners cannot afford to stay in their home or they do not qualify for any foreclosure prevention programs, repossession is the only remedy. While no one wants to be forced from their home, the burden can be lessened by applying for Exit Gracefully programs.
Under the Home Affordable Foreclosure Alternatives (HAFA) Program, homeowners have two options for transitioning out of their mortgage. The first is to enter into a real estate short sale. In this situation, banks allow the property to be sold for less than the mortgage note balance.
The second is deed-in-lieu (DIL) and involves returning the property title and transferring ownership to the mortgage company.
The advantages of seeking foreclosure help through Home Affordable include being released from the mortgage note without having to pay additional funds and receiving up to $3,000 in relocation assistance funds.
Homeowners that enter into short sales or deed-in-lieu on their own may very likely be held responsible for deficiency amounts occurring between the loan balance and sale price. This is often several thousand dollars and can take years to repay.
Banks can pursue borrowers by obtaining court ordered deficiency judgments. In some cases, lenders seek restitution through wage garnishment. While there have been many horror stories published about banks being brutal with foreclosures, there are many more stories where lenders have helped homeowners keep their property.
Becoming educated about ways to prevent Freddie Mac foreclosures is the key to a positive outcome. Make use of all available resources to learn what to expect and how to prepare for meetings with lenders. Click here to visit our real estate blog and read about other foreclosure prevention strategies.
Published on May 24, 2012 at 09:40 AM