The current economy is unfortunately causing a enormous amount of foreclosures. Individuals who are threatened with this possibility need to understand there are options for them. The lender may be willing to work with the homeowner in regards to saving their home from foreclosure.
The options obtainable to homeowners
The very first subject that should be discussed is the option of a loan alteration. This is when then lender offers the homeowner different choices that will help them pull themselves out of the possibility of foreclosure. You must qualify for a loan alteration, which requires proof of some kind of hardship that has lessoned your income, by some kind of accident at work or pay cuts that may have affected your current lifestyle. You will start by writing the lender a hardship letter explaining the reason for a loan alteration. First and perhaps the most popular form of help comes in lowering the homeowner’s interest rate. Lenders are willing to do this for you in order to lower your monthly payment and allow you to catch up on the late payments you have accrued. It is best to do as much research as you can on the loan alteration course of action because already though it may save you from foreclosure, there may be some kind of repercussion at the end of the agreement.
With lowering your interest rate, you may be stuck with a balloon payment at the end of your mortgage. This rate can be refinanced and paid out in payments, but it is just one thing you should consider before choosing this specific method. Another popular method that the lender may offer is to lengthen your existing mortgage schedule, this will also lower your mortgage payments and allow you to catch up on your late payments. Decreasing the rule is also a very effective way in avoiding foreclosure because once again, it will help to lower your payments. Fixing adjustable rates is in addition another option obtainable to homeowners. If your rates have fluctuated, you have the choice to lower your rate to save money in addition.
Also obtainable to homeowners looking to avoid foreclosure by loan alteration is the lender offering the opportunity to forgive default payments and fees and sometimes a combination of both. Another less-than-popular choice in avoiding foreclosure is the time of action of a short-sale, which is basically when the lender chooses to sell the house for a loss instead of take a much larger loss that a foreclosure involves. There is the choice of basically taking a break from paying mortgage payments for three to six years, but you will be required to payback the missed mortgage payments by a rising extent after two years.
The benefits of forensic audits
If an attorney is involved in helping you with the loan alteration course of action, they can perform what is called a forensic audit. This can sometimes prove to be very helpful in that they will review your existing mortgage page by page to find any kind of discrepancy. Many times, during the loan course of action, things are overlooked or not proven in a proper fact. For example, if there was some kind of verbal agreement that the lender did not follow by on, this is a matter that should be discussed. If the lawyer succeeds in discovering any kind of inconsistency, your lender may be more than willing to help you out of your foreclosure difficult situation. The lenders law department is eager to take care of situations like this and these matters tend to resolve rather quickly. Forensic auditing is basically a tool that allows the homeowner to have some kind of leverage when negotiating with the lender.
If you do not have the income you had during your original mortgage loan, loan alteration may be the answer. Start out by writing the letter of hardship and see where this takes you. Again, companies that take care of these situations everyday can help you with the letter and getting approved. If you are approved, lowering your monthly mortgage rate will help you to get back on track with your payments and avoid the dreaded course of action of foreclosure.