How to Apply for Foreclosure Assistance

Foreclosure proceedings can be initiated soon after you miss your first mortgage payment, however the Department of Housing and Urban Development (HUD) describes several types of foreclosure assistance that are available to borrowers in default. The kind you may be eligible for depends upon where you’re in the foreclosure process. The more time you wait to take actions to prevent foreclosure, the more restricted your choices will be.

Get in touch with your lender, a housing counselor or both before or just after you miss a mortgage payment. HUD contends that the earlier you make the telephone the higher your chances of saving your home. If at all possible, make a payment to stop yourself from falling three full payments behind, after that point the foreclosure process will already be well underway. If you’re only 30 or 60 days late, the Federal Trade Commission claims you might still be able to work out a payment plan directly with your lender and prevent a stride in foreclosure proceedings.

Consult your lender that foreclosure aid programs they participate in. As the Building Home Affordable website states, Fannie Mae and Freddie Mac loan servicers should take part in the government’s recently instituted mortgage modification plan, and other private lenders are encouraged to participate. Many significant banks provide government foreclosure aid programs as well as their own choices.

Document your case for claiming financial hardship. In case your cash problems are not temporary, a payment plan will likely not function for you. Instead, you probably ought to get into a less expensive mortgage to prevent foreclosure. A mortgage modification, wherever your lender adjusts the conditions of your loan to make a more manageable monthly payment, might work. To qualify for many alterations, including the federal government’s Home Affordable Modification Plan, however, you ought to be able to prove that you cannot make your payment moving forward.

Collect pay stubs or tax returns exceeding that your mortgage payment exceeds 31 percent of your monthly pre-tax income. Although this requirement is unique to the Home Affordable Modification Program, it’s also an affordability calculation employed by most lenders.

Consult your lender about more extreme choices to prevent foreclosure if you can’t be qualified for a repayment plan or mortgage modification. If you can’t keep your home due to unemployment or reduced income that prohibits you from making a reduced monthly payment, you may still stop foreclosure. Having a brief sale or deed-in-lieu of foreclosure, you lose your home but prevent foreclosure. In a short sale, your lender lets you sell your home for less than the balance on your loan while forgiving the gap. Having a deed-in-lieu of foreclosure, you voluntarily transfer your house’s deed to your lender in exchange for the cancellation of the remainder of your debt and wander away, according to the Federal Trade Commission.

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