CONSCIENCE SPENDING

When you are dealing with some a financial turmoil and fear the loss of the house, know you are not alone. Similar to millions of other property owners, maybe you have lost a job or suffered a pay cut, your adjustable rate mortgage could quite possibly have reset so you can’t afford the payment, or falling property values mean you simply can’t refinance. You might think that bankruptcy, foreclosure and loss of your property is inevitable. One answer doesn’t cover every scenario, and you will have options that include keeping your house as you sort out financial challenges. Explore all options before concluding that all will be lost in foreclosure or bankruptcy proceedings.

Your loan payment, that could include amounts for property insurance and taxes, is most probably the heaviest single bill you have to pay on a monthly basis. The check covers your housing needs, and it also represents an investment for most homeowners – you will discover financial and emotional aspects in the process. If you can’t make your home loan repayments, you should have a hard review of your situation, financially and otherwise, and choose on an alternative that’s the right one for you. Consulting a bankruptcy or real estate lawyer in your area can help with your decision-making process.

Consider All Options

This is the set of options and factors you will need to consider:

• What is the magnitude of your financial crisis – is there a principal element, like a job loss, or is paying an individual debt at the bottom of one’s financial problems, like medical bills or your mortgage?
• Is your financial crisis temporary, such as a short period of unemployment or underemployment, or is there a permanent change, such as a disability that can affect your earning power on a long-term basis?
• How much equity is in your house?
• How does the value of your house compare to the debt it secures – do you owe more than the house is worth?
• How does your current home meet your housing needs – is it the right size, what are the ongoing maintenance and ownership costs, and does the location meet your lifestyle, family, and employment needs?
• Is home ownership the best way to meet your housing needs? Do you have the abilities and resources needed to own the place in which you currently live?
• If you want to keep your home, have all options for loan modification been explored?
• If you don’t want to keep your home, have you tried to sell it, either through conventional means or through a short sale?
• Is your lender willing to pursue foreclosure alternatives, such as accepting a deed in lieu of foreclosure?
• Have foreclosure proceedings started, and if so, how far along is the process?
• Would you qualify Chapter 7 or Chapter 13 bankruptcy relief?
• Do you have other debts, and could those debts be discharged or restructured through bankruptcy?

Making Home Affordable Relief

Before reaching the final stage of bankruptcy or foreclosure, find out if refinancing or changing your mortgage is an available option. In reaction to wide-spread economic crises suffered by so many homeowners, the Making Home Affordable program offers relief. Financialstability.gov is a government Website that makes data available about eligibility as well as the process for getting help. The Internet site includes an interactive tool that will decide if you’re qualified to apply for relief.

Making Home Affordable has two types of relief:

1.Home Affordable Refinancing for homeowners who may have loans owned by Fannie Mae or Freddie Mac. This program targets individuals who haven’t been able to refinance their mortgages at today’s substantially low rates as a result of dropping home values, leaving them “underwater” along with a mortgage balance that’s greater than the home value

2.Home Affordable Modification for homeowners who can’t afford their mortgage payments on account of loss or decrease in income, increased mortgage rates or who don’t qualify for a Home Affordable Refinancing. This program aims to change your mortgage terms and also to bring the payment within a reasonable range

Begin by contacting your lender or loan servicer, butbe patient and persistent. These programs are new, and lenders must work to quickly implement the programs and also the demand is high. Although you may don’t qualify for these programs, work with your lender to discover a solution. Avoiding foreclosure usually is best for all parties.

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