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The Foreclosure Series Part 3 - What Your Lender Can Do to Help You Avoid Foreclosure


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You've got to act fast the moment you feel that you are at risk of foreclosure. One thing you must prevent from happening is the filing of a Notice of Default. This notice is basically a shout out to everyone that you are behind your mortgage payments, and if not dealt with accordingly, lenders can seize your home.

As soon as you see trouble looming ahead, call your lender and work out some home-saving methods. You don't have to be scared or embarrassed because lenders are more than willing to help homeowners figure out a way to avoid foreclosure, as long as you let them know early. Lenders can give you options according to the kind of financial situation you're in like:

  • Forbearance - gives you more time to settle your mortgage payments. Lenders or mortgage companies will, for the meantime, allow you to pay less than the full amount of the mortgage. If you're lucky, they may even allow you not to pay anything at all, as long as you prove to them that you will have the resources (salary bonus, tax refund, etc. ) to pay them sometime in the future.

  • Repayment plan - you can ask your lender to allow you to carry over unpaid amounts to your monthly payments. Let's say your monthly rate is $1,000, and you've been delayed for two months already, you can add $100 each month until you pay the amount in full.

  • Loan modifications - as the name implies, you make certain changes in the agreement. Here, lenders can freeze or adjust the interest rate to make it more manageable for you. You can extend the number of years in which you are to pay them; go from an adjustable-rate mortgage to a fixed- rate mortgage; or add neglected payments to your current loan.

  • Refinancing - if you meet certain requirements from your lender, they can help you increase your loan balance so that you can include back payments to it.

  • Partial claim - as long as you meet the specific criteria, lenders can help you get an interest-free loan from the Housing and Urban Development that you can use for delinquent payments.

  • Debt forgiveness -simply means that the lender waives your obligation to pay, which is something that happens very rarely.

    With the numbers of evicted people continually rising, more people are putting the blame on lenders, when ironically, these are the first people who can help you save your home.

    Next on the Foreclosure Series: Fight for Your Homes, Stop Foreclosure

    Housing Assistance Network - - is a site that aims to help those who are in the low to moderate income brackets find financial assistance for housing, help in acquiring a new home, or grant programs from both state and non-government institutions.

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