Since 2006, millions of homeowners in the United States have lost their homes and properties due to foreclosures. As a result, the federal government and most lending institutions are now offering a lot of foreclosure assistance programs that are aimed at minimizing, if not totally eradicating, the number of people who are threatened with the loss of their homes.
Although the largest financial institutions in the country have agreed to a moratorium in foreclosures, it is just temporary. So you still have to find ways in which you can manage your mortgage payments better and, more importantly, prevent losing your home today or in the future. Below are some of the loss mitigation programs that may be available to you.
Repayment Plan is one of the foreclosure assistance programs that cater to people who have encountered short-term financial difficulties. If you were unable to pay your mortgage for a month or two because you became suddenly sick or you had an unexpected and important expense to pay, you can avail yourself of this repayment option.
Just be sure to contact your lender or loss mitigation professional to know the guidelines for applying for this type of assistance program.
Short sale is also another option for people who are already desperate and do not have any capacity to pay their home loan. With this loss mitigation option, you will need to sell your home at a discount in the hopes that apart from paying off your debt you will still have some money to keep for yourself.
However, you need to realize that if you choose this over other foreclosure assistance programs, you might need to pay certain taxes and you can still end up losing your home and having no money. So before you consider this option, you might want to really think it over.
Of all the foreclosure assistance programs, one of the most popular is loan modification. The aim of this program is to make payments for your home loan easier for you by negotiating for permanent changes in the terms of your loan. Some of the things you can ask the lender to modify on your loan are the payment schedule, the amount of your monthly payments, and even the interest rate that is applicable to your mortgage.
However, in order to get approved for mortgage modification, you need to show your lender that you can really afford the new payment terms.