Homeowners Facing Foreclosure: Do not walk away
November 5th, 2008 by 
admin
After all your hard work, it is indeed tough to be in a situation where you are at risk of losing your home to foreclosure. Although the government and the housing and mortgage industries have launched numerous foreclosure assistance programs, there is still a significant number of distressed homeowners facing foreclosure. Some of these troubled borrowers, out of desperation and hopelessness, have finally decided to walk away and leave their homes.
But according to HUD-approved Foreclosure counselors, walking away from your mortgage problems is never the answer. Troubled borrowers who choose to do so realize too late that there are actually options that they could discuss with their lenders to avoid foreclosure.
Considering that over 50 percent of distressed homeowners who ignore notices from their lenders as well as phone calls end up in foreclosure, it is vital that these troubled borrowers know that they are handling their problems the wrong way.
For certain, your mortgage problems will not go away because you are ignoring them. Walking way is just the same thing.
With the millions of homes in some stage of foreclosure, lenders are now more willing to work with the homeowners to stop foreclosure. It could mean a lot of savings for them in terms of foreclosure and holding costs.
For the Federal Trade Commission, foreclosure can be prevented with the following options:
- Re-instatement or simply update your mortgage account by paying entire amount past due plus other fees and penalties.
- Re-payment will allow you to pay a portion of your unpaid balance in addition to the regular mortgage payment due until you bring your mortgage account current.
- Loan modification involves the lender agreeing to change the terms of your existing mortgage contract permanently to allow you to manage your mortgage payments better.
- Deed in Lieu of Foreclosure will allow you to pay your entire mortgage debt and avoid an ugly foreclosure entry to your credit record.
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- State Legislators Urged to Pass Bill for Homeowners’ Protection from Foreclosures
Posted in Foreclosure Crisis | 
1 Comment »
November 5th, 2008 at 12:10 pm
I’m pretty sure that the first two options are pretty meaningless for most people facing foreclosure. If they could pay off the past-due amount, they probably would have been making their payments.
Loan modification became much more difficult in the face of massive mortgage securitization. There may not be any one person or organization that “holds” your mortgage.
Deed in lieu of foreclosure may be have some of the issues that modification does.
In either of the last two options, the mortgage holder must be willing to change their valuation of the mortgage. That causes ripples down the entire chain of securitization that make doing so more difficult.