OaklandCityFarmer
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So many of us are new to the idea of self sufficiency and many have been doing it for many years now. Either way many have chose to purchase a new house, property or refinance an old house for repairs or to buy down debt. Through this there have been many unscrupulous practices from lenders and agents as well as situations arising from people renting and their landlords get foreclosed on.
I work in a community based organization that assists people in saving their homes and with renter's rights. I'm not plugging organization (which I will not even name). I am simply trying to let folks know about their rights and some options.
Also, I know that some feel that this is not the fault of the lending industry and it is the fault of borrowers not 'reading what they sign'. I'm not trying to debate the principles of sub-prime lending, predatory loans, the lending industry and its regulation or the practices of agents.
If you find yourself in any phase of a foreclosure don't panic! Lenders will normally begin the foreclosure process after you are 3 months behind. The first way you know you're at risk of foreclosure is when you receive a Notice of Default. This will state that you have defaulted on your loan and the lender is beginning the foreclosure process against you. This is the point where you are more likely to get a loan modification or loan negotiation. Contact a non profit agency that can help you negotiate your loan. Contact your lender and ask them if there is a way to work out some sort of agreement. Make sure you respond to every letter you receive from your lender to let them know you are still willing to negotiate and you're not abandoning your responsibilities.
Many lenders are now being faced by actions from community based organizations, government agencies and other institutions and are more willing to negotiate with borrowers. Save all correspondence with your lender and ask that any agreement made is sent to you in writing so you can review this.
There are many options that you (and hopefully a counselor) can negotiate with your lender.
Loan Modificationa permanent change in one or more of the terms of a borrower's loan, allows the loan to be reinstated, and results in a payment the borrower can afford.
Loan Forebearanceis basically a time that the lender will not take any action against you to allow you to gather assets. The lender will usually make an agreement with a set date for repayment.
Loan Recastingthe lender will work out a new amortization schedule typically with the same interest rate. This will usually require the borrower to make a large payment to the principal.
Deed-In-Lieuthe borrower signs over all collateral property (the house) to the lender in exchange for release from all obligations from the loan.
Short Salesometimes referred to as a quick sale, the borrower sells the property (usually within a pre-specified time frame) and cuts their losses. Using the proceeds from the sale to pay down the loan. The borrower is then obligated to pay the rest of (smaller amount) of the loan. This is usually a last resort option but also requires that there is a buyer for the property.
A loan counselor can help you pick the best solution. You can find one by calling HUD at (800) 569-4287. You can also visit HUD online to Find a HUD approved counselor
You can also call ACORN Housing Corporation at 888-409-3557.
For persons who have been actually foreclosed on you should know that there are protections regarding evictions. You have the rights like any other tenant to be properly notified and the foreclosing bank or new owner (if the property has been sold) has to follow legal and proper eviction procedures.
Never, never give your information to anyone but an approved agency or HUD certified loan counselor. Do your homework, ask questions and never pay someone to "save your home". These are scams and you will get burned for more money and lose your home.
There are many aspects of foreclosure that I did not cover but I just wanted to give you a brief "know your options".
Good luck.
I work in a community based organization that assists people in saving their homes and with renter's rights. I'm not plugging organization (which I will not even name). I am simply trying to let folks know about their rights and some options.
Also, I know that some feel that this is not the fault of the lending industry and it is the fault of borrowers not 'reading what they sign'. I'm not trying to debate the principles of sub-prime lending, predatory loans, the lending industry and its regulation or the practices of agents.
If you find yourself in any phase of a foreclosure don't panic! Lenders will normally begin the foreclosure process after you are 3 months behind. The first way you know you're at risk of foreclosure is when you receive a Notice of Default. This will state that you have defaulted on your loan and the lender is beginning the foreclosure process against you. This is the point where you are more likely to get a loan modification or loan negotiation. Contact a non profit agency that can help you negotiate your loan. Contact your lender and ask them if there is a way to work out some sort of agreement. Make sure you respond to every letter you receive from your lender to let them know you are still willing to negotiate and you're not abandoning your responsibilities.
Many lenders are now being faced by actions from community based organizations, government agencies and other institutions and are more willing to negotiate with borrowers. Save all correspondence with your lender and ask that any agreement made is sent to you in writing so you can review this.
There are many options that you (and hopefully a counselor) can negotiate with your lender.
Loan Modificationa permanent change in one or more of the terms of a borrower's loan, allows the loan to be reinstated, and results in a payment the borrower can afford.
Loan Forebearanceis basically a time that the lender will not take any action against you to allow you to gather assets. The lender will usually make an agreement with a set date for repayment.
Loan Recastingthe lender will work out a new amortization schedule typically with the same interest rate. This will usually require the borrower to make a large payment to the principal.
Deed-In-Lieuthe borrower signs over all collateral property (the house) to the lender in exchange for release from all obligations from the loan.
Short Salesometimes referred to as a quick sale, the borrower sells the property (usually within a pre-specified time frame) and cuts their losses. Using the proceeds from the sale to pay down the loan. The borrower is then obligated to pay the rest of (smaller amount) of the loan. This is usually a last resort option but also requires that there is a buyer for the property.
A loan counselor can help you pick the best solution. You can find one by calling HUD at (800) 569-4287. You can also visit HUD online to Find a HUD approved counselor
You can also call ACORN Housing Corporation at 888-409-3557.
For persons who have been actually foreclosed on you should know that there are protections regarding evictions. You have the rights like any other tenant to be properly notified and the foreclosing bank or new owner (if the property has been sold) has to follow legal and proper eviction procedures.
Never, never give your information to anyone but an approved agency or HUD certified loan counselor. Do your homework, ask questions and never pay someone to "save your home". These are scams and you will get burned for more money and lose your home.
There are many aspects of foreclosure that I did not cover but I just wanted to give you a brief "know your options".
Good luck.
