Mortgage Relief, Bankruptcy or maybe Foreclosure?

In case you are in front of a fiscal catastrophe and fear losing your own home, understand you are not alone. Similar to millions of other property owners, maybe you have lost employment or suffered a pay cut, your adjustable rate mortgage could have reset and also you can't afford the payment, or falling property values mean you can't refinance. You could think that bankruptcy, foreclosure and loss of your house is inevitable. A single answer doesn't deal with every scenario, and you'll have possibilities that include keeping your house while you sort out financial challenges. Explore all options before concluding that all will be lost in foreclosure or bankruptcy proceedings.

Your loan payment, which might include amounts for property insurance and taxes, is probably the biggest single bill you have to pay each month. The check covers your housing needs, and it presents an investment for most homeowners - you will find financial and emotional aspects also. If you fail to make your home loan repayments, you'll want to take a hard review of your situation, financially and otherwise, and come to a decision on an option that's most effective for you. Consulting a bankruptcy or real estate lawyer in your area can help with your decision-making process.

Consider All Options Listed here is a set of options and factors it is important to consider:

What is the magnitude of your financial crisis - is there a dominating element, like a job loss, or is paying one particular debt at the root of the financial problems, like medical bills or your mortgage?
Is your financial crisis short-lived, such as a short period of unemployment or underemployment, or is there an enduring change, say for example a disability that can affect your earning power on a long-term basis?

How much equity is in your house?

How does the value of your house compare to the debt it secures - do you owe more than the house is worth?

How does your current home meet your housing needs - is it the right size, what are the ongoing maintenance and ownership costs, and does the location meet your lifestyle, family, and employment needs?

Is home ownership the best way to meet your housing needs? Do you have the abilities and resources needed to own the place in which you currently live?
If you want to keep your home, have all options for loan modification been explored?
If you don't want to keep your home, have you tried to sell it, either through conventional means or through a short sale?
Is your lender willing to pursue foreclosure alternatives, such as accepting a deed in lieu of foreclosure?
Have foreclosure proceedings started, and if so, how far along is the process?
Would you qualify Chapter 7 or Chapter 13 bankruptcy relief?

Do you have other debts, and could those debts be discharged or restructured through bankruptcy?

Making Home Affordable Relief

In advance of reaching the significant stage of bankruptcy or foreclosure, determine if refinancing or changing your mortgage is possible. In reaction to common economic crises suffered by a multitude of homeowners, the Making Home Affordable program offers relief. Financialstability.gov is a government Internet site that has information on eligibility plus the process to get help. The Internet site has an interactive tool that will see whether you're a candidate for relief.

Making Home Affordable has two forms of relief:

1.Home Affordable Refinancing for homeowners who may have loans owned by Fannie Mae or Freddie Mac. This targets individuals who haven't got a possibility to refinance their mortgages at today's historically low rates as a result of declining home values, leaving them "underwater" with a mortgage balance that's over the home value.

2.Home Affordable Modification for homeowners who can't afford their mortgage payments thanks to loss or reduction of income, increased mortgage rates or who don't get a Home Affordable Refinancing. This program aims to modify your mortgage terms and bring the payment within an economical range.

Begin by contacting your lender or loan servicer, butbe patient and persistent. These programs are new, and lenders must work to quickly implement the programs and also the demand is high. In case you don't qualify for these programs, work with your lender to pinpoint a solution. Avoiding foreclosure is frequently best for all parties.