Last year my family and I were met with some serious decisions. I had been laid off the year prior and was on unemployment. My wife was a school teacher, but her salary combined with the money I was getting through unemployment was not enough to keep up with the mortgage payments on top of utilities, food, and clothing for my children. I didn’t want to see my children dressed like characters out of “Oliver”, so I went to my mortgage lender and began explaining the hardship which we were under and how it was going to be near impossible to keep up with the payments. Their advisor introduced me to a number of options to stop foreclosure. Not all of these options are available per lender.
- Special Forbearance is a written agreement between you and your lender on a repayment plan for the money you owe. There will also be a plan to eventually reinstate the loan after it’s been delinquent for a minimum of 90 days.
- Mortgage modifications are sometimes offered by the lender as a means to change the structure of an existing loan to make it easier to pay. Often with assistance through the governments HAMP program a mortgage can change to make monthly payments lower or even the overall principal!
- Sometimes a lender will allow you to sell prior to foreclosure and pay off most of the remaining loan but not all of it. This saves you money and doesn’t necessarily hurt your credit score.
- Deed in lieu of foreclosure is a last resort. You might be able to give your property back to the mortgage company. It doesn’t save your home, but it helps your chances of getting another mortgage loan in the future.
Getting to know your debt to income ratio
There were other options laid out before me on that table that afternoon, and most of them came from the programs available through HUD. I wasn’t anywhere close to giving my house up at this point, but life had gotten hard for all of us and I knew that if my lender didn’t agree to make changes I would eventually lose my home to foreclosure. The Homes Affordable Modification Program was started in 2009 as an attempt to stabilize the housing market. The program itself encompasses a wide ranging demographic as there is a system in place designed to help families of all income levels. The main thing you absolutely have to prove is sudden and unexpected financial hardship.
A Letter of Hardship
I spent the next evening sitting down with my wife and going over out debt to income ratio. All of our utilities were added up, any medical expenses, money owed for other loans, car payments etc. Then we designed a “letter of hardship” which your lender will require in order to even consider refinancing to stop foreclosure. In this letter we went to every length to provide evidence that all we could afford was food, clothing, and shelter. With this detailed letter of our debt to income ratio we worked with our lender to stop the mortgage foreclosure.
I couldn't have done all this had I not found advice through www.real-estate-yogi.com on how to stop the foreclosure process. They worked with me step by step to save my home. Visit their website today or call them directly any time at 1-800-987-1397.