Foreclosure is something that will come about when you fail to pay your loan. Your mortgage lender most will not automatically place you in a plan to get your mortgage current.
You need to put the plan in motion and supply the lender with the documentation they want in order to analyze your financial position and stop the foreclosure process.
Many lenders do not want to foreclose on your property if it can be avoided, but they do want to make sure you can and will follow through on any promises you make to bring your mortgage current.
If you simple try to hide from the lenders no one will be able to show you how to avoid or stop the foreclosure.
Teamwork between the home owner and the mortgage company is your best chance of stopping the foreclosure process. As we expressed earlier, the mortgage lender doesn't desire to foreclose and is normally prepared to agree to special terms in order to stop process.
The terms are negotiable and it is to the homeowners advantage to develop a plan before trying to contact the mortgage company.
This plan should be thoroughly examined by professionals before presenting it to your lender as it becomes extremely hard to change after the fact.
Below are the 3 secrets to stopping a foreclosure:
You will be asked to deposit money towards the account. We typically refer to this as good faith payment. The dollar amounts mortgage lenders are looking for is normally someplace between 30% - 45% of the total amount which is essential to getting the mortgage loan completely up-to-date.
The Mortgage Companies demand your money as a down payment for a couple of reasons - 1. To get the mortgage loan up-to-date faster 2. To prove to the mortgage lender you are sincere in wishing to get the loan current. They also need to use this as a punishment for getting behind on your payments. If they permitted people to do this without holding this deposit, statistics find many more customers would miss payments without a sound reason.
You need to document your current financial situation to offer proof that you can indeed afford the loan payments. While this can indeed be tricky you need to be extremely accurate and honest as they might not accept alterations once it is submitted.
The final step is to prepare a letter that explains in detail why you fell behind. This letter is usually called the financial hardship letter. This letter must be sincere and show them you want to stop the foreclosure and that you deserve another chance.
You should roll everything into a "workout package" and present it to the mortgage company in a format they can understand which allows for them to make a conclusion quickly and responsibly. Many lenders will look at a mortgage loan modification or a repayment plan as a first alternative to getting the mortgage up-to-date.
Loss mitigation plans were first brought about by the federal government and the mortgage industry to slow the tide of home foreclosures.
Mortgage lenders are all different in how they react to homeowners with payment troubles and every mortgage lender has their own personal policies concerning the use of loss mitigation to stop foreclosure.
Although the standards for admittance into loss mitigation programs do vary from one mortgage lender to another. Most are generally based upon the homeowners net monthly income, number of payments missed, how soon they can begin making payments, and the involuntary scope of their financial hardship.
Mortgage lenders will not just automatically put you into the loss mitigation program, lenders will carefully evaluate your financial situation and review mitigation policies prior to formulating a foreclosure avoidance strategy.
They will then use the appropriate plan to negotiate an affordable win-win solution in order to bring your loan up-to-date.
Remember if you're experiencing temporary financial hardship, you do have a choice. The last thing mortgage lenders want to do is foreclose and take position of your property. If you take the time to learn the process you can figure out how to avoid or stop foreclosure quick.