Have you Decided Foreclosure is Unavoidable? What Now are Your Options and Choices?

In these terribly difficult times more and more families are finding, often through no fault of their own, that keeping current on their home payments is just not possible. Families in this situation often feel like they are traveling down a very foggy unfamiliar road with no idea what lies ahead or what to do.

Are you one of these unfortunate people? Have you made the decision that foreclosure is unavoidable? Has this decision been made even if your loan is currently protected under the temporary Fannie Mae and Freddie Mac moratorium on foreclosures? This article will help you avoid even further problems and give you information that you definitely should review before letting foreclosure actually take place.

Before we go further you must be aware, before allowing foreclosure on your home, of the bottom line on foreclosure. Allowing a foreclosure will certainly and totally ruin your credit. Default on other types of loans, such as credit cards, will stay on your credit record for 5 to 7 years but default on your home will stay on your credit record for ten full years. So what are your options?

Although it is not fun or enjoyable in any way you must be sure you have looked at your options; all your options. One option that some families try is a short sale. Be aware that short sales are just as bad on your credit record. They may help your lender but you get no credit for even trying to help the lender out and still have a bad mark on your credit for ten years. Furthermore your lives will be unfairly interrupted and much of your time wasted as persons with no intent to offer you a fair price on your home parade by. If you should find a buyer in this terrible credit and home sale market, you must move out to allow the new buyer to move in. With a foreclosure your state may allow you to stay in your home for up to 4 months as a renter. That is one of the few good things, and only in some states, that result for you and your family as a result of a foreclosure on your home.

If the situation you find yourself in has reached the point where you have received a Notice of Default and it appears the lender will proceed with foreclosure there are, in some states, ways to stop foreclosures. The worst thing you can do is nothing. You must be active and you may already be too late. Some lenders will allow forbearance if you take the step to contact them. Forbearance means you and the lender work out a new repayment plan that you can live with and that they will accept. Sometimes all you need to do is ask. Make sure you are taking to the actual company that holds and owns your mortgage and not just some servicing agency.

Another way to work out something with your lender is debt forgiveness. This is where the lender agrees to let you miss one or two payments. This means whatever caused you to get to the point where you were behind is now over; such as unexpected unemployment, payment of unexpected medical bliss, etc. In other words you feel you can make your payments, as required under your mortgage agreement but you cannot find a way to make up the missed payments. This used to be a very rare arrangement but in the current economic climate some banks and lenders are more flexible towards this option.

Repayment planning is also an option. This is where you and the lender agree to let you work out a new repayment plan. For example the lender may allow you to add $50 a month to your current payment amount until you have caught up and all payments are current.

If none of the above mentioned options will work for you make sure you ask your lender if any of the new options and plans discussed and mentioned in the news by the FDIC and the federal government are applicable to your loan and situation. It is against the law for them to withhold information on any options that both you and they have with your loan.

If after all these efforts foreclosure looks unavoidable beware the scammers that will deluge you with offers and promises to help you out of the situation. Most of these are looking to put you in even a more serious situation. Do not make any agreements without the knowledge of your attorney and your lender.

Lastly let us say to you that if there still appears to be no way to avoid foreclosure please understand that you do not need the help of anyone to walk-away from your home mortgage. All that needs to be done you can do on your own. For additional advice you can call on persons at these links. They are honest and their job is to help you as much as possible.

http://www.nfcc.org/ - which is the Credit Counseling section of the National Credit Foundation

http://www.hopenow.com/ - which is the address for Hope Now, another organization that can make sure you have investigated all possible alternatives to foreclosure. They also have state specific information for all 50 U.S. states.

We hope that some of the information in this article is helpful to you and your family.
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Have you Decided Foreclosure is Unavoidable? What Now are Your Options and Choices?

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