avoiding foreclosure

Government Mortgage Program Allows Recourse Against Lenders For Compliant Homeowners

The Home Affordable Mortgage Program (HAMP) was started in 2009 to help homeowners avoid foreclosure, and its goal is to provide lower monthly payments to borrowers who have defaulted on their payments, or who are likely to default. It has been extended to December 31, 2015 and the requirements relaxed to encourage more applications. A typical HAMP homeowner may be able to reduce the mortgage payment as much as 35%. The biggest problem with the program is it does not reduce the principal amount of the mortgage.

The main obstacle to qualifying is the borrower must be employed, in order to document an ability to make the required monthly payments. Other requirements include a mortgage obtained before January 1, 2009, loans less than $729,750 on a residence, with higher limits on 2, 3 or 4-unit rental property, a financial hardship, and no recent felony conviction. Keep in mind the law is always changing, and if lower payments are needed, an application should be submitted. Continue reading

Taking the mystery out of short salesQ: The value of my residence is less than the amount that I owe on the mortgage, and because I lost my job, I cannot continue to make the loan payments. Do I have any option other than losing the property to foreclosure?

A: Given the one‐two punch of falling property values and increasing unemployment, the number of homes with debt that exceeds their value, and the owners inability to keep payments current, have caused short sales to become an increasing share of the market. Whether a short sale is a better alternative than foreclosure is subject to many factors, including the flexibility of seller and buyer, and convincing the lender that it can get a better deal from the short sale than the inevitable foreclosure. The keys to a successful short sale are patience, persistence, and a convincing package that satisfies all of the lenders’ requirements. Continue reading

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