Stopping Foreclosure Through Lender Mediation
There is more than likely a few things which have led to your being in the situation you are in now. You may have been through a bitter divorce, lost your job or experienced an illness. The bills are piling up and the increased price of utilities are staining your budget, perhaps you have an adjustable rate mortgage (ARM) which has skyrocketed; it is getting difficult to cope.
Unfortunately, while you're worrying about stopping foreclosure of your home, you're bombarded with letters, postcards, phone calls and strangers driving by and knocking on your door.
These foreclosure investors specialize in chasing homeowners just like you who are close to losing their homes. They're interested in buying your home and profiting from it, because they believe you must sell the home.
While on a surface it may seem like a good idea to sell your home to these foreclosure investors in somecases, but before you do so you should look into the alternatives. Definitely do not sell your home to one of these investors before checking out your other options, such as rearranging your loan.
One of the Solutions To Stop Foreclosure Is Lender Mediation
Once you have missed a couple of payments, your credit rating will begin to be affected your credit score will likely drop considerably, which will make it extremely difficult to refinance your current loan.
However, mortgage lenders would really rather not end up owning your home; this is why every mortgage lender has a loss mitigation department which tries to work with homeowners who are in default on their mortgages to bring them back onto a timely payment schedule. Unlike refinancing your mortgage with a new loan, this loss mitigation process does not require getting a credit approval, putting this alternative within reach for homeowners who are in default.
A Repayment Plan May Still Be Challenging
The loss mitigation departments at mortgage lenders tend to be understaffed, especially right now with mortgage defaults on the rise. The employees in these departments do their best but have very little time to devote to each homeowner's case file. This means that lenders tend to offer you a standard repayment plan which may not meet your needs, for example, the monthly payments will likely be too high for your budget and the time limit given to get back on track far too short.
With the difficult situation you are in, you may be tempted to take this repayment plan offered to stop foreclosure; however, this is generally just a short-term solution. Since the terms of the repayment plan are not a realistic fit for your budget, you will as likely or not be facing foreclosure again in a matter of months.
Watch Out When Hiring Workout Professionals To Stop Foreclosure
One of the simplest, yet little known ways to get a lot better outcome through the Loss Mitigation process is to hire an experienced professional to do the work for you. These are companies that have experience of negotiating literally thousands of workout cases for owners in default. Some have established working relationships with the Loss Mitigation departments of many mortgage lenders nationwide.
These companies will look over your finances and help you come up with a repayment schedule, which is possible for you to meet; payments will be kept as low as possible to make it easier for you to make your payments. These companies have intimate knowledge of the programs offered by different lenders and can negotiate a better deal for you than you would be offered by the lender on your own. They may even be able to negotiate a lower interest rate on your mortgage, which will lower your payments.
You may think that these services will be too expensive, given your financial difficulties; however, most of these services charge a low flat fee, usually about a months payment. With the money and time these negotiations can save you, they usually more than pay for themselves? They can often even negotiate a deferral of your next payment.
If Lender Mediation Is Not An Option
What if loss mitigation isn't a possibility for you? Then you may have to go ahead and sell your home to prevent having a foreclosure record on your credit report. Listing your home for sale with a realtor is the best way to go if you have ample time, since you will be able to get a higher price for your home. If you are short on time, you may find that selling to an investor makes the most sense; just try to deal with an investment company, which has the resources to close the deal quickly.
Unfortunately, while you're worrying about stopping foreclosure of your home, you're bombarded with letters, postcards, phone calls and strangers driving by and knocking on your door.
These foreclosure investors specialize in chasing homeowners just like you who are close to losing their homes. They're interested in buying your home and profiting from it, because they believe you must sell the home.
While on a surface it may seem like a good idea to sell your home to these foreclosure investors in somecases, but before you do so you should look into the alternatives. Definitely do not sell your home to one of these investors before checking out your other options, such as rearranging your loan.
One of the Solutions To Stop Foreclosure Is Lender Mediation
Once you have missed a couple of payments, your credit rating will begin to be affected your credit score will likely drop considerably, which will make it extremely difficult to refinance your current loan.
However, mortgage lenders would really rather not end up owning your home; this is why every mortgage lender has a loss mitigation department which tries to work with homeowners who are in default on their mortgages to bring them back onto a timely payment schedule. Unlike refinancing your mortgage with a new loan, this loss mitigation process does not require getting a credit approval, putting this alternative within reach for homeowners who are in default.
A Repayment Plan May Still Be Challenging
The loss mitigation departments at mortgage lenders tend to be understaffed, especially right now with mortgage defaults on the rise. The employees in these departments do their best but have very little time to devote to each homeowner's case file. This means that lenders tend to offer you a standard repayment plan which may not meet your needs, for example, the monthly payments will likely be too high for your budget and the time limit given to get back on track far too short.
With the difficult situation you are in, you may be tempted to take this repayment plan offered to stop foreclosure; however, this is generally just a short-term solution. Since the terms of the repayment plan are not a realistic fit for your budget, you will as likely or not be facing foreclosure again in a matter of months.
Watch Out When Hiring Workout Professionals To Stop Foreclosure
One of the simplest, yet little known ways to get a lot better outcome through the Loss Mitigation process is to hire an experienced professional to do the work for you. These are companies that have experience of negotiating literally thousands of workout cases for owners in default. Some have established working relationships with the Loss Mitigation departments of many mortgage lenders nationwide.
These companies will look over your finances and help you come up with a repayment schedule, which is possible for you to meet; payments will be kept as low as possible to make it easier for you to make your payments. These companies have intimate knowledge of the programs offered by different lenders and can negotiate a better deal for you than you would be offered by the lender on your own. They may even be able to negotiate a lower interest rate on your mortgage, which will lower your payments.
You may think that these services will be too expensive, given your financial difficulties; however, most of these services charge a low flat fee, usually about a months payment. With the money and time these negotiations can save you, they usually more than pay for themselves? They can often even negotiate a deferral of your next payment.
If Lender Mediation Is Not An Option
What if loss mitigation isn't a possibility for you? Then you may have to go ahead and sell your home to prevent having a foreclosure record on your credit report. Listing your home for sale with a realtor is the best way to go if you have ample time, since you will be able to get a higher price for your home. If you are short on time, you may find that selling to an investor makes the most sense; just try to deal with an investment company, which has the resources to close the deal quickly.
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It's time for you to stop foreclosure of your home through loss mitigation. Don't delay and start looking for a referral to loss mitigation .
posted by Credit Counseling at
2:45 PM
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