Alternative to Foreclosure

Sphere: Related Content There are alternatives to going into foreclosure. As a professional in the mortgage and real estate industries, I have witnessed many people go into depression thinking they were never going to get out of the financial slump they were in. I certainly don’t encourage anyone to go into foreclosure, of course, due to the unfortunate circumstances that the previous homeowner would have to go through.
First and foremost, borrowers and homeowners who feel they are having problems making monthly payments towards their debt should talk to their bank about any alternatives or suggestions they may have for the borrowers. Some lenders will not tolerate late payments and may issue the foreclosure process to begin as soon as possible, without giving the homeowner a chance to make handle the situation with the alternative options.
There are three options the borrower or homeowner may qualify for.
1. A repayment plan, which gives the borrower(s) the opportunity to make their monthly payment including a few extra to make up for the missed payments.
2. A forbearance agreement, which is an agreement between the lender and the borrower, which allows the borrower to make reduced payments, or none at all, until the mortgage is brought current.
3. A loan modification, which reduces the borrower's monthly mortgage payment through the re-amortization of the loan, extends the term of the loan, or reduces the interest rate.
In addition, a new law was just signed by the president that will implement a program, starting October 11, 2008, to help struggling homeowners. Therefore, if you are having problems paying some of your bills, you may want to consider contacting FHA to find out if you would qualify for their new program and if there was anything else they could do to help you. Also, some very knowledgeable mortgage professionals may be able to help you out with that matter as well.