When there is a surprise change in a person’s income – someone passed away, was injured, or became gravely ill – it has a direct effect on that person’s mortgage payment ability. He may fall behind, landing him is default on his mortgage loan. This situation could end up with the lien holder filing mortgage foreclosure, but there are things to do to prevent that. The following will delve into how to stop a foreclosure so no homeowner will have to worry about losing his home.
Pittsfield, MA -- (SBWIRE) -- 01/24/2013 -- There was a family that had a beautiful home. Their lawn was always well-tended and their gardens were always blooming with health and brilliant color. Then one day the wife developed a headache that just wouldn’t quit. She did what everyone does and took some aspirin. Several weeks later, it came back with a vengeance. Soon afterward, the woman passed away. Her husband, understandably devastated, went into a deep depression, during which he missed several mortgage payments. After almost 5 months, the bank sent him warning letters, telling him about mortgage foreclosures, and asking him to come in so they could work something out. Realizing that he may be about to lose the house he and his wife loved so much, the man made an appointment with his banker to talk things over. The banker was sympathetic to the man’s situation and told him about an in-house program the bank had to help homeowners in default keep their homes. He spoke of doing a mortgage modification, which involved changing the terms of the original loan by lowering the interest rate or reducing the principal. He also mentioned refinancing the loan, which meant that the original mortgage would be paid, and a new one written up, one that had different terms. The man chose the former option and was able to retain possession of his beloved home.
There are other options, too, to stop a mortgage foreclosure. The federal government developed HAMP (Home Affordable Modification Program) to help homeowners who are struggling to make their mortgage payments each month. The requirements to qualify for the program are fairly simple. One of them is that the homeowner must provide proof of a financial hardship. Others include showing that the property is not condemned, providing proof that the new payment will be affordable, and that the original mortgage was obtained on or before January 1, 2009. HARP (Home Affordable Refinance Program) offers to pay off the old mortgage and devise one that has a lower interest rate or a longer repayment period, and PRA (Principal Reduction Alternative) encourages lenders to reduce the principal of mortgages that were more than the home was worth.
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