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Home Foreclosure Options that Keep You in Your Home
by Yuwanda Black
TheSyndicatedNews columnist

Yuwanda Black has published 10 e-books, a freelance writing e-course and hundreds of articles on small business, real estate, freelance writing and marketing. Ms. Black wrote and self-syndicated a small business column to eight on- and offline outlets in 2002-2003, including Greater Diversity News; The Mississippi Link; The New York Christian Times; Houston Style; Caribbean Life; and

If you’re facing home foreclosure, there are many options from which to choose. The one that’s right for you will primarily depend on your finances and familial situation. Following are some home foreclosure options to explore that keep you in your home, instead of forcing you out of it.

Restructuring of Payments: Sometimes circumstances beyond your control cause you to face home foreclosure. In situations like this, the best course of action is to ask your lender to restructure your mortgage payments.

Every lender handles these requests differently, but they all have one thing in common – they don’t want your house. Remember this as you negotiate. Two of the options mortgage lender may offer are as follows:

Lowering your monthly payment: Usually your payment will be lowered for a set period of time to allow you to: (i) not fall further behind; and (ii) catch your financial breath, so to speak. This time frame can be for a quarter, six months or a year or more. During this time, you can work to get your finances in order so that you can resume normal payments.

Entering into a forbearance agreement: Forbearance is when a lender agrees not to foreclose if a homeowner agrees and adheres to a payment plan that will “cure their mortgage delinquency.”

Usually, the mortgage lender agrees to let the homeowner pay a portion of the mortgage now, and the rest over a longer period of time.

Be sure to get any agreement you come to with your lender in writing. Most will overnight it to you to sign and send back to them for their records.

Refinance Your Mortgage: In the most recent mortgage crisis, many homeowners face foreclosure because they got into the wrong type of mortgages (eg, adjustable rate mortgages (ARMs)).

In cases like this, refinancing into a traditional, fixed-rate loan is often the best option because it usually lowers the monthly mortgage payment. Whether or not you are able to finance will depend on the amount of equity in the home, your credit history and your payment history.

Even if you’ve missed a payment or your credit is marred, don’t be afraid to ask for this option. Particularly in this market, lenders are flexible because, as alluded to above, they don’t want your home. So it’s in their best interest to work with you to help you hang onto your home.

If you decide not to refinance with your current lender, make sure that all paperwork will be taken care of in time to stop the foreclosure process. The foreclosing lender is more likely to delay the foreclosure sale if you can show that you are working to resolve the situation and that it will be done in a timely manner.

Personal Finances: The last option is the one that likely caused the home foreclosure process to begin – not having enough money to pay the mortgage. While obvious and simplistic, there are two options for overcoming this, ie: i) increase your income; or ii) decrease your spending.

Both of these options require discipline, honesty and sacrifice for it means you have to take a hard look at your spending habits to see where you can cut (decrease spending). Alternatively, it may mean taking on a second or even third job to increase take-home pay.

What many homeowners fail to realize is that it’s not the large purchases that hurt most budgets. It’s the daily, nominal amounts that add up hundreds a month, which can mean the difference between having enough to pay the mortgage, or falling short and into foreclosure.

Published: Aug 29,2008 10:41
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