What are some ways to stop a forclosure? If not, buy some time.?

Question

As a loan officer, there are times that we can't do nothing for clients because of lack of value in the home or very bad credit or whatnot. What are other ways for these home owners to keep their homes from being foreclosed?

Answer 1

There are a few options:
1) contact HUD (The U.S. Department of Housing and Urban Development)
2) Declare bankruptcy
3) Try to find a Foreclosure Specialist, although they can be legitimate, they Charge alot, and I speak from experience. One said they could help me and the charge was 3000.00, ok if I had that much money, wouldn't I use it to pay my mortgage?
4) or 4, depending on their income, they can contact the legal aid department in their state and they can stop the foreclosure.

Here's a couple of websites for you, hope this helped...



Are you having trouble keeping up with your mortgage payments? Have you received a notice from your lender asking you to contact them?

Don't ignore the letters from your lender
Contact your lender immediately
Contact a HUD-approved Housing Counseling Agency
Toll FREE [phone]
TTY [phone]
If you are unable to make your mortgage payment:

1. Don't ignore the problem.

The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house.

2. Contact your lender as soon as you realize that you have a problem.

Lenders do not want your house. They have options to help borrowers through difficult financial times.

3. Open and respond to all mail from your lender.

The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notice of pending legal action. Your failure to open the mail will not be an excuse in foreclosure court.

4. Know your mortgage rights.

Find your loan documents and read them so you know what your lender may do if you can't make your payments. Learn about the foreclosure laws and timeframes in your state (as every state is different) by contacting the State Government Housing Office.

5. Understand foreclosure prevention options.

Valuable information about foreclosure prevention (also called loss mitigation) options can be found on the internet at www.fha.gov/foreclosure/index.cfm.

6. Contact a HUD-approved housing counselor.

The U.S. Department of Housing and Urban Development (HUD) funds free or very low cost housing counseling nationwide. Housing counselors can help you understand the law and your options, organize your finances and represent you in negotiations with your lender if you need this assistance. Find a HUD-approved housing counselor near you or call [phone] or TTY [phone].

7. Prioritize your spending.

After healthcare, keeping your house should be your first priority. Review your finances and see where you can cut spending in order to make your mortgage payment. Look for optional expenses-cable TV, memberships, entertainment-that you can eliminate. Delay payments on credit cards and other "unsecured" debt until you have paid your mortgage.

8. Use your assets.

Do you have assets-a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don't significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home.

9. Avoid foreclosure prevention companies.

You don't need to pay fees for foreclosure prevention help-use that money to pay the mortgage instead. Many for-profit companies will contact you promising to negotiate with your lender. While these may be legitimate businesses, they will charge you a hefty fee (often two or three month's mortgage payment) for information and services your lender or a HUD approved housing counselor will provide free if you contact them.

10. Don't lose your house to foreclosure recovery scams!

If any firm claims they can stop your foreclosure immediately if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional, or a HUD approved housing counselor.

Answer 2

That's a tough place to be in. On one hand, you want to help your client and on the other, you're not Jesus.

The best way to stall a foreclosure is to see if the lender has violated the truth in lending act. A real estate lawyer can help and maybe you two can work out some type of deal for a free or low cost consultation.

Bankruptcy might stall it, but they might end up losing their home and end up ruining their credit even worse if their only debt was the mortgage payments.

Their best bet is to sell it. There are a lot of investors out there that will buy it from them and lease it back (like what Greg was stating) but I would look at the specifics of the situation before I could comment on it.

Regards

Answer 3

You can refer them to www.prosper.com (if they've got a computer). Prosper is a community of people who come together to pool their money and provide individual loans to people.

You set up an account with them and apply for a loan. You state what you're trying to do and what you need to borrow. Prosper pulls your credit and lists you as A,B,C, F, etc. which could impact the interest rates.

After you set up the request people "bid" on how much they will loan you and for what interest rate (there's a cap on the iterest levels though, so it's alright). Once enough people have bid to fill the loan request Prosper sends you the money and sets you up for payments. Loans are set up to be paid back over 36 months. Each month you make a payment Prosper divides it among all the lenders according to how much they put into the loan.

It's pretty neat and most people get loans.

Whatever you do counsel them to NOT go to a payday loan place. These places are a total rip-off. The debts are at like 25% to 30% MONTHLY. They'll never get out of debt that way.

Answer 4

Simple ... sell it!

Find an investor to buy it "subject to" the financing and they can re-sell it either outright, or they lease option it to someone else who can afford the payments but might not be able to qualify for a traditional loan. They repair their credit while paying your mortgage and rent credits towards their down payment. In 6 - 24 months, when they are able they refinance the property into their own name. (Most lenders do an automatic refi after 12 months of them making timely payments from their checking account.)

To those that may say this does not work, or it's a scam, I say "So sorry little grasshopper, it works like a charm." Everyone wins in this scenario and it's a great service you can do to the person in foreclosure, the buyer that wants a house, the bank that really has no interest in foreclosing, and your wallet as an investor.

When life hands you lemons ... make enough lemonaide for EVERYONE!

Don't believe it? See my profile and buy one of my properties or sell me yours!

Answer 5

Pres bush had the federal governement put a National Foreclosure Hotline in place for homeowners in jeopardy...they can give advise and options...
1-888-995-4673

this was announced both on CNN and CBS last week.

good luck ♥

Answer 6

The only way to stop it is filing bankruptcy, but that only delays the inevitable.

Answer 7

agree with first one, or sell it ..
borrowing more money will get homeowners in more trouble
later

Answer 8

Pay up. That's about it.