Being behind on your mortgage payments and facing foreclosure can be an extremely stressing situation for any homeowner. Losing your investment and being evicted can be a traumatic situation for any family. However, there are foreclosure alternatives that you may take when it comes to deciding the future of your family and that your bank will usually not tell you about.
Home Affordable Refinance Program
Also known as HARP, this program offers homeowners who have already defaulted on their loan, the option to refinance if they have equity on their home. This government-sponsored program allows homeowner to refinance the mortgage into a fixed rate mortgage that will help them avoid a high-interest rate in the future. Keep in mind that HARP is meant to help you get a new, more affordable and more stable mortgage deal, not get you out of your current mortgage. In order to apply to harp you will need to fill out and application and pay the application fees as well as any refinance fees that may come after your current deal is re-financed.
Negotiate With Your Bank
While the bank will usually not offer the option to negotiate with you, if you do not qualify for HARP, it is possible to ask for a modification with your lender if you’d like to keep your home. If you wish to negotiate with your bank, the first step is to get the advice of a counselor approved by the Department of Housing and Urban Development. He will explain your option and set up a meeting with your lender in order to negotiate what’s best for both.
Go To Court
While usually considered an extreme measure, due to the high costs associated with the legal system, If you can find an excellent lawyer who will build a strong case for you, taking the bank to court over incorrect paperwork or a technicality can help you keep your home. While taking the lender to court may sound very tempting at first, it is usually done after all negotiations have failed.
A final measure that will help you keep your loan ONLY if you haven’t defaulted on your loan. Chapter 7 bankruptcy will ensure that there’s a roof over your head while you re-build your credit and picky yourself up. Chapter 7 bankruptcy has a lot of financial consequences and you should file for Chapter 7 only if you are certain there’s no other way out and only if you are still current on your loan.