Stop Foreclosure: 1 Really Easy Thing You Can Do to Buy More Time to Save Your Home
Nowadays, if you’re a homeowner facing foreclosure, you’re in luck because there are more options available to you than ever. Following is one really easy route you can take to buy more time to save your home.
Prevent Foreclosure by Requesting a Forbearance Agreement from Your Lender
This is easier than you think — especially in today’s housing market. Why?
It’s really quite simple. Banks are in the business of lending money, not buying and selling homes (ie, the real estate market). But, this is exactly the business many find themselves in these days because so many homeowners are facing foreclosure.
The Latest Home Foreclosure Statistics
According to the Reuters article, UPDATE 4-One in 7 U.S. mortgages foreclosing or delinquent:
A record one in seven U.S. mortgages were in foreclosure or at least one payment past due in the third quarter, according to fresh data signaling the recovery in the housing market will be tepid at best.
RealtyTrac® (http://www.realtytrac.com), the leading online marketplace for foreclosure properties, put some real numbers behind these findings to bring it into clearer focus. It’s U.S. Foreclosure Market Report™ for Q3 2009, showed the following:
. . . foreclosure filings — default notices, scheduled auctions and bank repossessions — were reported on 937,840 properties in the third quarter, a 5 percent increase from the previous quarter and an increase of nearly 23 percent from Q3 2008.
So, now do you see why banks are so willing to work with you to stop foreclosure. Your lender doesn’t want your home. They want you to stay there and continue making payments — even at a reduced amount like in a forbearance. Because, ifyou don’t, they lose money.
Now that you know why banks are so willing to give you a forbearance nowadays, let’s look at some specifics of this easy way to prevent foreclosure and buy you more time to get your finances in order so you can stay in your home.
Stop Foreclosure: Particulars of a Forbearance Agreement
Type of Homeowner It’s Suited To: This agreement is particulary helpful for homeonwers who have temporary financial setbacks, eg, the sudden loss of a job.
What a Forbearance Agreement Does: The lender agrees to reduce your montly mortgage payment for a defined period of time. This timeframe is usually around six months, but it is not uncommon for them to be longer in today’s economic climate.
What Happens After the Forbearance Period Ends: Once the forbearance time period expires, a repayment plan kicks in. When you first make the agreement, you promise to make your regular monthly mortgage payment, plus an additional amount that covers all reduced payments that were made during the forbearance period. This repayment plan usually lasts for about a year.
This is a win-win for all because it allows you some financial breathing room, while assuring the lender that they will get their money (in time).
Stop Foreclosure via Forbearance: Repayment Plan Tip
In today’s foreclosure crisis, it’s not uncommon for homeowners to get away with NOT having a repayment plan as part of their forbearance agreement. Instead, ask your lender to tack all missed and/or partial payment monies due onto the back of your home loan.
Documents Needed to Start the Forbearance Process: You will need bank statements, tax returns and any other financial documents the lender requests that proves how/why you are currently unable to pay, and will be able to repay inthe future.
Usually, you need one year’s worth of banks statements and two years worth of tax returns. But, this varies from lender to lender. They will tell you what you need. And, be sure to get it to them in a timely manner.
Forbearance Tip: In addition to reduced payments, some lenders allow up to 6 months free of payments (ie, no mortgage payments due).
While all of this may sound too good to be true, it’s not. If you know your options and operate from a position of power — as discussed in this post on stopping foreclosure – you’d be amazed at what your lender will agree to. Whether you’re seeking a mortgage modification, a forbearance or other prevent foreclosure option, always keep this in mind.
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Qualify for a Home Loan, Even with Bad Credit
Has a past bankruptcy, foreclosure, or other bad credit challenge stopped you from applying for a home loan? Need to know how to qualify for a mortgage in spite of these credit challenges? Now you can get the mortgage qualification info you need.
P.S.: Business Opportunity: Learn how to secure your financial future (and retire early) by buying foreclosures cheap.
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Learn more about getting a forbearance in the video below.
Copyright © 2009 Yuwanda Black for Foreclosure Business News. Article may not be reprinted or reproduced in any manner without the express, written consent of the author.