Save Your Home with Loan Modification and Forbearance Agreements

Save Your Home with Loan Modification and Forbearance Agreements

One of the most stressful things to deal with is the possibility of losing your home. Unfortunately, there are many people facing this threat.
What many people are not aware of is the fact that there are many programs available to help prevent foreclosure. Your lender will usually try to set you up with any options available. It is far less expensive for your lender to help you avoid foreclosure, than to have to take your home away.
The great news is, just because you are three months behind on your mortgage, does not mean that you will lose your most prized possession. You can still hold on to your home. However, the most important thing you can do to prevent losing your home is simply to contact your lender. They are usually willing to work out something with you, as long as they are aware that you truly want to make things right.
Here are two options available for you to utilize to help you save your home.
Loan Modification
If you are able to currently make your regular mortgage payments, but are having a difficult time catching up from the past-due amount, you can negotiate with your lender to fold any past-due amounts into the unpaid principal balance. This would include interest and escrow, and the new amount will be re-amortized over a new period of time.
If you are unable to make payments at your current rate, negotiations can be made with your lender to extend your loan balance for a longer period of time, which will make the loan amount at a more affordable level.
Forbearance Agreements
Let’s face it, temporary financial hardships can ultimately devastate your financial situation. Unfortunately, people who live paycheck to paycheck will have a very hard time “catching up”. This is especially true with house payments. Because you are not allowed to fall very far behind on a house payment, never mind the fact that you have paid faithfully for the last ten years prior to those last three months of hardship, your house is at risk.
Many lenders will offer you a Mortgage Forbearance Agreement. This means they will reduce or delay payments for a specific amount of time, and then at the end of that time, arrangements will be made to bring the account current. Many times, the lender will cease legal actions, with the understanding that you will bring your account current at a specific time. Lenders may combine your Forbearance with a Reinstatement or Repayment Plan, as long as they are comfortable you have the ability and means to pay back the amount due to bring your account current.
Another type of Forbearance is “Special Mortgage Forbearance Agreements”. This is a written plan to help you repay your missed payments to avoid foreclosure. With this type of Forbearance, you may be allowed to postpone your monthly payments for up to four months.
Although it is sometimes very easy to set up a Forbearance Agreement with your lender, your lender could make it very difficult. This is why it would be beneficial to contact a third party to help protect your needs and rights. Don’t wait until you lose your home. Talk to your lender, and learn the options available to you to help you protect your home.

New York Foreclosures

Learn How New York Foreclosures are Different than Most States
New York foreclosures are handled quite differently than most states. It is very important to know the laws of foreclosure in your own state.
How does New York Foreclosures differ from many other states?
There are judicial and non-judicial foreclosures.
In short, most states use the non-judicial approach. This means that because properties are held by a deed of trust, the foreclosure process does not include the State Courts. A foreclosure is handled at the County level by the Trustee Sales that is arranged by the lender. So, foreclosures in “trust states” take quite a bit less time than judicial foreclosures. In fact, a foreclosure in a “trust state” can take as little as 104 days from the time between a Lis Pendens (notice of mortgage default) and the Foreclosure Auction.
Properties in New York are secured through mortgages instead of deeds of trust. Foreclosures in New York are considered to be judicial foreclosures because the foreclosure proceedings must go through the courts before a property can be sold at a public auction. Because proceedings must go through the courts, it takes about 12 to 18 months after a Lis Pendens has been filed and the property hits the auction block. The reason it takes so long is because all people involved, (including mortgage holder, creditors, tenants of the owner, etc.) have to be served with papers.
Eleven Judicial Foreclosure States
• New York
• Maine
• Connecticut
• New Jersey
• Pennsylvania
• Ohio
• Indiana
• South Carolina
• Florida
• Louisiana
• North Dakota


Now that we are familiar with the differences between judicial and non-judicial foreclosure states, it is important to know the process of a judicial foreclosure. The following are steps that will be taken prior to and after a foreclosure in the state of New York.
What happens before a foreclosure process is put into action?
• The lender may send a warning of impending foreclosure to the borrower. PLEASE NOTE – although this may be done as a courtesy to you, it is NOT a requirement in New York.
• The lender files suit against the borrower for the amount in default.
• The borrower is then notified of the foreclosure proceedings and it required by law to appear in court. At this point, a lis pendens (notice of pending lawsuit) is recorded.
• If the borrower does not appear in court, the court will rule against the borrower, thus allowing the foreclosure sale.
• If the borrower appears in court, the court will consider the case before ruling. If the court rules against the borrower, the foreclosure sale will be scheduled. This will usually take 7 – 9 months.
What happens once a foreclosure has been scheduled?
• The date of sale will usually be scheduled at least 4 months after the court ruling.
• The notice of sale has to be published in the local newspaper once a week for at least 4 weeks before the sale.
• In New York, the foreclosure sales are made by public auction at the county courthouse. The highest bidder will receive the property. Anyone can bid, including the lender.
• The winning bidder will usually have to pay ten percent of the final bid at the sale, and the remaining balance is due within 30 days.
• Once the property is paid in full, the winning bidder takes ownership of the property.
• The borrower will have no rights of redemption after the sale.

So what is Loss Mitigation??

Loss Mitigation is the art of helping delinquent homeowners, in or close to foreclosure, to save their home and of trying to stop a home foreclosure before it happens. It is an intervention program designed to help homeowners save their homes from foreclosure, through third party negotiations with the lender or investor. Although it seems as though Loss Mitigation is a new concept, it is a process that has been around for many years and can save homeowners and lenders tens of thousands of dollars (as well as a little heartache and time consumption).

Foreclosures and mortgage delinquencies are destroying the “American Dream” and are at an all time high right now and number in the millions. We could be facing the highest foreclosure rates in history and with option ARMs still adjusting, there is no significant ending in sight. Loss Mitigation is the most effective method of avoiding or stopping the foreclosure process which culminates in the sale of the property at a public auction. The goal of Loss Mitigation is to work out an agreement between the homeowner and the lender that will stop the foreclosure proceedings permanently. A truly successful Loss Mitigation workup will take the homeowners future ability to pay into account as well as their past arrears so that the homeowner does not get themselves into default again.

Homeowners are losing their homes at record rates with no end in sight. They often believe the answer to their prayers is refinancing their home and getting away from their current lender. However, they need to be very careful if they are relying on refinancing as the way to save their home from foreclosure. By the time their properties have gotten into default, they have missed at least 2 months of mortgage payments. Not paying a mortgage for 2 months or more is detrimental to a credit score and thus, they cannot qualify for refinancing the loan. The only viable option for most of these homeowners is Loss Mitigation.

Loss Mitigation is a process in which lenders help borrowers that are in danger of default, avoid foreclosure. Every homeowner’s situation is unique and each lender has their own policies regarding the use of these programs to stop foreclosure. Before a foreclosure or bankruptcy occurs after a one or two months default, a repayment plan may be proposed to the delinquent mortgage holder by a Loss Mitigation specialist to satisfy the amount owed to a bank or lender. Many banks and lenders want to avoid the foreclosure process since, on average; both homeowner and lender stand to lose tens of thousands of dollars. Lenders ultimately want to keep the home owner in their home and it is up to the home owner to show that they will be able to catch up or maintain the mortgage payment in the future. Borrowers must be encouraged to retain home ownership through scenarios that provide the borrower and lender/servicer with an optimal outcome. Often with the home owner they get stonewalled at the first level, and sadly the first tier in Loss Mitigation is really a glorified collections department. By hiring a third party Loss Mitigation negotiation company, the homeowner’s best interests can be fought for. In reality, a Loss Mitigation workup is in the lenders best interest as well taking into account the amount of money they stand to lose during the foreclosure process.

Loss Mitigation is the art of negotiating, on behalf of the homeowner, with the lender (or investor), stopping the foreclosure process, and coming to a settlement. Loss mitigation is often the better choice for the homeowner that is trying to save their home from foreclosure. When Loss Mitigation isn't a viable solution, other options are available to create win-win strategies with the homeowner and can be employed to help the homeowner avoid the foreclosure (possibly avoiding bankruptcy and 10 years of bad credit).

A unique way of getting involved in Loss Mitigation is finding a company that provides the training on free prequalification of a client and initial client handling and interviewing such as FFPS – Freedom Foreclosure Prevention Services. Loss mitigation is very rewarding and it is a great service. If you are facing the foreclosure process spiral, click here for a no obligation free consultation.

This is only the beginning of the swarm of foreclosure houses

Delinquency and foreclosure rates are rising on subprime mortgages. As evidenced through the most recent results from the Mortgage Banker's Association National Delinquency Survey of first mortgage loans, foreclosure rates are on the rise. Currently, the national delinquency and foreclosure rates are dominated by four states: Arizona, California, Florida and Nevada.

Foreclosures occur when an owner is behind in mortgage payments and the lender initiates foreclosure action on the property. Foreclosures are devastating for the homeowners and unfortunate for the lenders. However, homeowners and lenders are not the only parties involved. Foreclosures also affect families with children living in rental units and set in place a negative spiral for at-risk neighborhoods. Foreclosures are harmful for borrowers, lenders, the neighborhood, and locality.

Foreclosures in Western states are increasing faster than in the Eastern US. Nationally, the number of foreclosures this March, 2007, was 47% higher than the previous year. Most experts agree that these high foreclosure rates are not likely to decline any time soon.

As this year has progressed, more and more individuals and families are being forced out of their homes by banks and lenders, yet half of the borrowers who enter into foreclosure never call their lenders. Sub-prime lenders are often cited as a big factor in raising the foreclosure rates due to adjustable rate mortgages and other forms of predatory lending. In addition, the lenders' attempts to auction off the wave of foreclosed homes as quickly as possible, to liquidate their falling mortgage assets, is pushing down home prices.

The real problem is that over the past four years, the government has been telling lenders that they’ve been discriminating against poor would-be home buyers, and that they haven’t been making enough loans to low-income folks, or minority groups. At the same time, increased lending to households with limited financial resources raises the likelihood of higher default rates. While the impact will be felt most in low-income and minority communities, the national economy could also be severely affected if faith in the housing finance system falters.

The only good news is that an increase could mean lenders will work with homeowners rather than foreclosing immediately. Lenders contend they are helping borrowers work out troubled loans so that they can stay in their homes. Against a backdrop of rising foreclosures and increasing criticism over the way lenders are handling loan "workouts," housing advocates are stepping up efforts to prevent foreclosures that will lead to local residents losing their homes. Freedom Foreclosure Prevention Services (FFPS) is one of the leading companies in this field. Our primary focus is stopping foreclosure by using advanced loss mitigation techniques that help the homeowners and mortgage lenders reach resolutions, while keeping the best interest of the home owners in mind. With the state of the market, FFPS is recruiting thousands of consultants to keep up with the rising foreclosure rate. For more information on how you can do your part to help homeowners avoid foreclosure click here.

As unemployment and mortgage defaults continue to rise, efforts to promote homeownership among low- and moderate-income households will only be successful if accompanied by measures to control default rates and increase cure rates for borrowers already reaching delinquency. With subprime defaults increasing and a grim forecast for the near future, many are calling for legislative changes to help keep Americans in their homes. Congress has addressed this issue through a number of hearings on the prevalence of subprime loans and the increased mortgage defaults and foreclosure rates that have resulted from their use.

The FHA has historically had a higher default rate because they loan more money to low income families than conventional financing. The way the FHA loan program is currently structured, FHA will give the lender back all of the money owed on the loan if the home buyer defaults. To qualify as a “high-default" lender, the mortgage banker must have a foreclosure rate that is at least 1. However, for all lenders who do FHA loans, the average default rate is just over 2.

Soaring foreclosure rates are sending states scrambling. No matter the reason, the fact remains that foreclosure rates are increasing drastically throughout the US. Other higher foreclosure rates are expected in generally high cost regions with or without minority communities. Foreclosure rates are expected to continue to increase as the subprime mortgage crisis continues. If you or someone you know is 2 or more months behind in their mortgage and in jeopardy of losing their home due to foreclosure, click here for a free no obligation consultation and let us help. If you want to help homeowners avoid foreclosure, think about the benefits of Loss Mitigation.