Most of the issues currently bothering homeowners worldwide is keeping up with mortgage payments, why not refinance into a more fixed rate mortgage. This is the most practical option and is worth a try.
The FHA program was made generally to help the homeowners refinance a safe 30 year government backed mortgage. It is actually one of the official responses to the housing crisis. But to qualify for this you need to be among one of the following.
- A homeowner with ARM mortgage that is late on two consecutively paid mortgages or over two different times at least the last twelve months. These types of homeowners must have at least 97% LTV (Loan - Value) in order to be able to refinance in the FHA program.
- Those homeowners who have ARM mortgages which have been late for 3 consecutive mortgage payments or 3 different times in over 12 months. Those homeowners who have been late 3 times must at least have 90% LTV (Loan - Value) ratio.
If lenders want to have the choice of writing the balance of either 90% or 97% respectfully to have FHA secure refinancing to more people and be more accessible especially to those homeowners with 100% Loan – value ratio. We encourage you that you let the banks have the write downs or refinance as much as they possibly can into a safe FHA secure loan. However, it is voluntary also that the bank take write downs and make the loan work for the homeowner. The actual amount of refinance is determined by a qualified appraiser of the FHA where the ratios will be calculated after the appraiser’s findings.
If ever you are at the stage where you tried to refinance following the above options but were unable to, the Hope Now Alliance can basically help try creating a modification or workout of your current loan with your lender. You can easily get started by calling them; the service is worth trying and is free. There is no harm in trying.
Homeowners Bailout Bill
The Homeowners Bailout Bill or Hope for Homeowners was the proposed name of the FHA Foreclosure Prevention Program which has just been signed into law. The new housing legislation calls upon the FHA to create New and fixed rate loans. Democrats have also asked lenders to try hold off on foreclosures on people which may have a chance to be able to qualify for the program. The following guidelines are supposed to be the qualifications to be able to avail of the Homeowners Bailout Bill.
- The house must be the primary residence, second homer and investment properties are not eligible.
- You debt ratios must be higher than 31%, if it is lower you will not be considered to be in hardship.
- The mortgage must be taken within the period of January 2005 – June 2007.
- You must submit proof that you cannot afford the current mortgage that you have, submit your monthly payments for the mortgage and other loans along with paystubs.
- Present any proof that you are able to afford the new mortgage, 90% of payment of the appraised value of the home. You must be able to make payments comfortably.
- Your home equity lines should be paid off and satisfied.
- It is voluntary for your bank to impart in the program; you are allowed to partake in the said refinance program.
- If you are qualified for the program you will be refinanced for 90% of current appraised home value, in which most of the cases would substantially lower the payment. You would also have to stay in your home for a specific duration of time or you would have to give proceeds to FHA if ever you decide to sell the property early.
If you are not able to get the desired help from Hope Now you have the option to look for companies that focus in the modification of loans and keeping homeowners in their homes. Most companies provide free consultation for homeowners but it is still better to check with the local BBB just to be safe.
In some states, they have specific funds for emergency intervention in the foreclosure of a home. You just need to call the state housing department to see what is available because this may vary from different states.
This is selling your home for lesser than the amount you owe in mortgage. Short sales may be used in order to avoid foreclosures and to carry the benefits of not having a home foreclosure written down in your credit report. This kind of transactions must first be approved by the bank or holder of mortgage and may hold the homeowner liable for the remaining balance of the home. If you negotiate short sales with the mortgage holder it’s vital to assure that the transactions result is full satisfaction of the debt.
Deed of Lieu of Foreclosure
Try calling your bank and give the house back to avoid having foreclosure on your record, this has to be done as a last resort. Remember, having home foreclosure on the record can prevent you from purchasing a new home for as long as 5 years.
This means calling your lawyer to help delay having your home foreclosed until the bank will decide to work with you. This strategy will work well if you find a good lawyer to help you buy some time.
It is still better to get a housing loan in which you would have no problem keeping up with the payments. Just in case the time comes that you find yourself in hard times and in danger of having your home foreclosed here are some help which may help you find a way to pay your mortgage. Try following the statements stated above and help save your home from being foreclosed.