If you are having financial difficulties, you may fear that you won’t be able to keep up with your mortgage. Perhaps you are already behind in your payments, so those dreaded foreclosure notices are showing up in your mailbox, and you’ve been ducking phone calls from your lender. While it is tempting to hide under the covers, you can’t afford to ignore your mortgage problems, not if you want to keep control of the situation. So stop hiding and meet the problem head on. If you are being threatened with foreclosure, all is not lost. You have options to stop this frightening process.
If you haven’t fallen behind your payments yet but expect to in the near future, try applying for the Home Affordable Refinance Program, or HARP, a government loan refinancing program for mortgages owned by Freddie Mac or Fannie Mae. If you qualify, you will be able to refinance your mortgage into a low-interest, fixed-rate loan that will significantly lower your monthly payments and keep you from getting into trouble with your lender. If you want to take advantage of this program, you need to hurry. It’s scheduled to expire at the end of December 2018.
Selling Your Home
If you are behind in your mortgage, selling your home is an option. This way, you stay in control of your destiny and do not end up with a foreclosure on your credit history. This option works best for people who really cannot afford the home they are in and whose home has accrued some equity since they bought it. If you fit into this category, try working with your lender to see if they will forego collecting mortgage payments until the sale is final.
If selling your home won’t cover the amount of your mortgage, you may be able to do a short sale. In this instance, your lender will agree to take the proceeds of the sale, even if they fall short of what you owe. If you decide to take this route, seek the guidance of an experienced attorney. Some lenders might still pursue you for the remaining loan amount, so you need expert advice before you proceed. If you agree to a short sale, you want your debt to be completely cleared.
Work with Lender
Lenders do not want to foreclose on your home. The process can be long and take up countless hours of their time. It often benefits your lender financially to work with you through a loan modification. Experienced real estate lawyers can help you through this process, which relies on the cooperation of the lender. They will often choose to help you if you are not too far behind in your payments, are gainfully employed, and have a variable rate mortgage that can be converted to a fixed term mortgage. You will have to provide documentation that includes a hardship letter, pay stubs, bank statements, itemization of monthly expenses and tax returns to finalize this process. Your lender isn’t legally obligated to give you this option, but they often will if you meet their criteria.
Chapter 13 Bankruptcy
Chapter 13 bankruptcy doesn’t alter the terms of your mortgage, but, if you are in danger of foreclosure, the process can help. You still have to remain current on your mortgage while in Chapter 13, but you will be able to pay back the arrears through your bankruptcy plan. That means you will have three to five years to make up those missed payments. Also, filing for Chapter 13 immediately stops the foreclosure process. Then, as long as you stay current with your payments and make up the arrears through your plan, the lender cannot foreclose. This benefit is why many people choose to go with Chapter 13 instead of Chapter 7.
You may also be able to “strip off” junior mortgages through Chapter 13. That means these loans become part of your unsecured debt which you pay back at a greatly reduced rate through your bankruptcy plan. Your second and even third mortgages are no longer attached to your home, making it easier to avoid payment issues in the future. You can start fresh with just one mortgage at the end of your bankruptcy process.
Contact The Mellor Law Firm
When you are in danger of losing your home, you do not have to panic. You can find ways to keep your home or at least extricate yourself from debt. If you are facing foreclosure in the Southern California area, contact The Mellor Law Firm. Our attorneys are experts in real estate law, so they can analyze your situation and explain your options. They can determine whether refinancing, government help, a short sale, or Chapter 13 is your best financial choice. Your attorney will then guide you through the entire process, explaining each step so that you understand exactly what is happening.The Mellor Law Firm has decades of experience in real estate, bankruptcy, business, construction and personal injury law. Our attorneys are uniquely positioned to give you the advice you need when foreclosure looms. For more information, contact us here or call 951-221-4745. We will help you find a solution to your mortgage issues.