It is possible to avoid foreclosure in California if you are delinquent or expect to fall behind on your mortgage payments because of several economic or personal hardship reasons. Avoiding foreclosure allows you to be pro-active in your financial life, and avoid the stress of a looming eviction, and get fresh start as soon as possible. Here are more reasons why you want to take action and avoid foreclosure
- Stop the the harassment calls from collection companies
- Get a good night’s sleep for the first time in several months.
- Save your credit
- Give comfort and peace of mind to your family
- Relieve the uncertainty
- Return to your normal life and day to day activities
You have several options to avoid foreclosure if you are now delinquent on your loan payments.
Option 1: Keeping your home and avoiding foreclosure
Here are ways that you can keep your home and avoid foreclosure in California
- Get a home loan modification and work with the lender to roll over any dellinquent balances into the loan, apply for a lower interest rate (i.e. usually fixed for 5 years, or a longer loan term up to 40 years) to get to the payment that you can afford.
- Apply for a principal balance reduction with participating lenders.
- Refinance to a lower interest rate and payments with qualifying credit, income, and property value.
- Pay down the accumulated delinquent loan balance by borrowing from your personal savings, 401K, IRAs, and borrowing from family and friends to bring your mortgage account in good standing again.
- Apply for a loan repayment plan with your lender to payoff the delinquent balance you owe and start making your monthly regular payments again.
The benefits of Avoiding Foreclosure in California
- Save your credit and avoid foreclosure on your record.
- A fresh start and elimination of stress related to holding on to a property you can no longer keep
- Take control of your life
Option 2: Selling your home thru a short sale or deed in lieu to avoid foreclosure
- A deed in lieu of foreclosure, or deed in lieu, can help you avoid a public sale or auction and may also help you start rebuilding credit sooner than if you go through foreclosure.
- Short Sale your home in California
Find out if you are eligible to refinance your home to lower payments even if your loan exceeds the value of your home.
If you are a homeowner who is current on your mortgage payments, have a loan balance that exceeds 125% of the value of your home, and your loan is owned by either Freddie Mac or Fannie Mae, you may want to check out the new changes to the HARP program to take effect as early as December 1, 2011 to take advantage of a refinance to lower your mortgage payments.
To find out if you are eligible for the HARP Refinance, here are a few things you should do first.
1) Check if your loan is owned by Freddie Mac or Fannie Mae. The servicer of your loan ((where you send your monthly payment may be Bank of America, Chase, or other lender/servicers but the owner of the note could be Freddie Mac or Fannie Mae.
Visit the link below to find out if Fannie Mae own your mortgage.
Visit link below to find out if Freddie Mac own your mortgage.
Are You On Time with your mortgage payments?
To be eligible for the HARP Refinance Program your loan must have been sold to Fannie Mae or Freddie Mac before June 1, 2009. The loan to value ratio must be more than 80%
Homeowners must be current on the mortgage payments in the past 6 months. They can not have more than one late payment in the past year
Borrowers must be able to afford the refinanced mortgage payment
Options for borrowers who are having a hard time making mortgage payments
California Homeowners who are experiencing difficulty in making mortgage payments and want to avoid foreclosure have access to some of the following programs and events where California borrowers and homeowners can educate themselves regarding foreclosure prevention options can get immediate help by getting in touch with loan servicer representatives and local housing counselors.
You may also contact HOPE now at 1-888-995-HOPE in order to speak with a HUD accredited counseling agencies, learn about forecosure options, homeowner resources, and events in your area. We encourage all of the client we work with who are considering a loan modification, deed in lieu, or short sale as an alternative to foreclosure to speak with a HUD certified counselor. Note that all counselors affiliated with HOPE Now alliance are free of charge to you. Take advantage of it.
One of the first steps you should consider when you are having a hard time making payments on your monthly mortgage is to contact your lender or loan servicer and find out what options are available for you to be able to continue making payments. Time is of the essence, because as you miss payments for over 90 days in California, your lender is within its legal rights to file a notice of default, which will eventually lead to a foreclosure if the delinquent payments, penalties, and interests are not paid within a certain date, usually several days before your home is scheduled for an auction.
Our advice is for you not to wait until you receive a notice of default from your lender. Instead be proactive and seek help as early and as much as you can.
Can no longer afford mortgage payments and need an exit strategy through a short sale?
If after exhausting all your options you have decided to sell you home, you would need to engage a real estate professional to help you sell your home and negotiate a short sale if applicable. We offer a free of charge consultation, you may call us at 760-798-9024.
Read more about How to do a Short Sale here.
We like our clients to be aware of all the programs, services, resources, available to you as a homeowner.
Check out Making Your Home Affordable and get assistance regarding your home and find out programs related to refinancing, loan modification, second loan modification, alternatives to foreclosure through the Home Affordable Foreclosure Alternative (HAFA) program that facilitates deed in lieu or short sale which provides up to $3,000 in relocation assistance to homeowners. We have experience in helping homeowners complete a HAFA Short Sale in California. Call us for more information at 760-798-9024.
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