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The Obama administration is making $3 billion in additional funds available to help troubled homeowners avoid foreclosure.

With mortgage delinquencies at an all-time high, there are lots of desperate homeowners seeking to avoid foreclosure -- and tons of scam artists trying to take advantage of that.

Avoiding foreclosure is a serious concern for millions of American homeowners. There is a lot of advice on methods to avoid losing your home when you are in financial difficulties. The Obama administration has an arsenal of loan modification programs, alternative foreclosure programs, forbearance periods for the unemployed programs and the list goes on and on. However, as it has been widely advertized, these programs have not obtained the results hoped. So what are the best options for a troubled borrower?

1)      Do not ignore the problem. A big issue with many homeowners is that they ignore their financial problems until it is too late. This ostrich syndrome of hiding our heads when we are in trouble is natural, but financially very dangerous. It is important to act straight away as soon as you realize you are going to be behind in your mortgage payments. The sooner you act the more options you have.

2)      Know your rights. Before you contact your creditors (and you should do that as soon as possible) look into your rights as a borrower. Read your loan documents carefully and refresh your memory on what your lender can do if you do not make payments. Review your state laws on foreclosure. Every state has different foreclosure laws and timeframes.

3)      Contact your lender as soon as possible. Did we already say that? I’ll say it again, contact your lenders. They are interested in finding a solution and providing you with a workout so you can continue paying your loan. There are many options to consider: forbearance periods, reinstatements, loan modifications, deed-in-lieu, refinancing… It all depends on your personal circumstances.

4)      Contact a legitimate housing counselor. Non-profit organizations sponsored by the government are ready to give you personalized advice. Call (800) 569-4287 and find one near you.

5)      Avoid foreclosure prevention companies. Some of them can help, but the bottom line is that you do not need to pay for these services. Unless you believe loan modification programs are part of a government conspiracy to take your home from you, why pay for a service the government provides for free. On the other hand, unscrupulous loan modification agencies and lenders can cause further damage to your financial situation.

Related posts:

1. Avoid Foreclosure By Calling Your Bank Early Says HOPE
2. Top 5 Steps to Avoid Foreclosure without Falling Into a Loan Modification Scam
3. Avoid Foreclosure With A Personalized Home Loan Modification

Related posts:

1. Avoid Foreclosure By Calling Your Bank Early Says HOPE
2. Top 5 Steps to Avoid Foreclosure without Falling Into a Loan Modification Scam
3. Avoid Foreclosure With A Personalized Home Loan Modification

If you do not qualify for a loan modification, and foreclosure seems unavoidable, there are steps you can take to make the most of a bad situation. One of these options is arranging with your lender for a Deed in Lieu of Foreclosure.

What does this mean?

It means you hand over the deed, or ownership, of your house to the lender in exchange of clearing your debt. The homeowner loses his home but is left without a debt while the lender takes immediate control of the house.

What advantages does this option have?

In certain circumstances a Deed in Lieu of Foreclosure can have significant advantages for both the lender and the buyer.

1)     The lender can take immediate control over the property. A much more efficient method than foreclosure proceedings that can take years to finish.

2)     The borrower foregoes his home but is left without any debt.

3)     Lenders can save themselves a lot of money in court expenses, time and other complications if they avoid a typical repossession procedure.

4)     Borrowers that avoid a foreclosure will remove the stain on their record and in some cases avoid bankruptcy.

What are the requirements for a Deed in Lieu of Foreclosure to be carried out?

1) The market value of the home must be less than the current balance of the mortgage.

2) There must be no third party credits secured by the home, like a second mortgage or a secured car loan.

Although it might seem counterintuitive for a homeowner to let his home, probably his largest investment, go without anything to show for it, it can be a much better alternative than a long and painful foreclosure. Borrowers don’t have to see their credit score hurt and can start again elsewhere, while lenders can cut their losses and try to make the most of a bad loan without having to continue spending money and resources.

In what circumstances should a homeowner think about handing a Deed in Lieu of Foreclosure?

Obviously, homeowners that are going through financial difficulties and cannot afford their monthly mortgage payments. However if they still have some sort of income then they may well qualify for a home modification or some other option. This path is more suited for homeowners that either cannot afford any kind of loan modification or feel that their home is too underwater, worth less than the mortgage balance, to be worth saving.

How is it done?

Both parties must agree to sign an Agreement in Lieu of Foreclosure. This document transfers ownership to the lender. In some cases the homeowner might pay a certain amount of money to reduce the loan and make sure her credit score is not affected. Once the document is signed the lender will issue a waiver to deficiency judgment, which will be used if the sale of the house is below the value of the mortgage. After this an escrow service executes the agreement; releasing both the lender and the borrower from their mortgage contract.

Related posts:

1. Foreclosure or Bankruptcy, What to Do When Loan Modifications Don’t Work
2. What Is A Foreclosure?
3. What Is A Loan Modification? The Three Keys To Loan Modification Success

Related posts:

1. Foreclosure or Bankruptcy, What to Do When Loan Modifications Don’t Work
2. What Is A Foreclosure?
3. What Is A Loan Modification? The Three Keys To Loan Modification Success

The sad reality is that an estimated 4 million households will lose their home to a foreclosure this year. Of course most of them will not go without a fight and will try to reduce their monthly payments with a loan modification.

Unfortunately loan modifications are not easy to come by and only a small percentage of troubled borrowers get a loan modification trial and an even smaller percentage get a permanent loan mod. This has created a practically brand new industry overnight, loan modification companies or consultants. This industry is not regulated allowing practically anybody to hang up a sign and start “working” as a loan modification consultant. This has caused many loan modification scams to crop up. This article aims at helping you avoid the scams and take the right steps to maximize your chances of loan modification success.

Step 1.

Contact your Bank or Lender first as soon as you realize you are going to struggle to make mortgage payments. It is always better to start planning for the worse before you are delinquent on your mortgage. You will need to contact your bank’s or lender’s loss mitigation department and explain your situation.

Step 2.

Be patient. Loan modifications take time and are difficult to get because a) they require plenty of paperwork and b) banks are not overjoyed with the prospect of losing money. However pressure is mounting on banks to stop dragging their feet and some lenders are increasing their loan modification completion rates substantially.

Step 3.

Contact HOPE’s hotline at 1-888-895-HOPE you will receive free help from trained counselors in multiple languages 24 hours a day. Although loan modification companies will tell you that these counselors are not good and that you need to pay to get a good service that has your interest at heart I recommend you give them a try. They are getting paid (obviously) just by the government instead of you.

You should also contact your local HUD approved counseling agency. You can find out where your closest office is by asking at the same hotline number detailed above. It is a good idea to visit a couple of counseling agencies and comparing the counsel they provide. The truth is that loan modifications are not THAT complicated, once you understand the basics and get down to the messy paperwork most people get ahead just fine. Getting approved, well that is just another thing altogether.

Step 4

Beware of loan modification scams. Here are some signals that give them away:

1)      Avoid ANYBODY (lawyers, companies or consultants) that asks for a prior fee for ANY loan modification service. Besides being a bad idea for obvious reasons it is illegal in many states.

2)      Avoid companies, lawyers or consultants that GUARANTEE your loan modification will be accepted or that they can stop a foreclosure. At best this is wishful thinking of a naïve consultant, most likely there are lies, in any case avoid like the plague.

3)      Avoid companies that tell you to stop making payments on your mortgage and pay them instead, this is the litmus test of fraudulent loan modification agencies.

Step 5

If you see evidence of a loan modification scam, or of bad practice with a loan modification company, do us all a favor and report them to 1-888-995-HOPE (4673). Loan modification scams are spreading fast but the Government is working hard to put them out of business. Many District Attorneys’ are making it their mission to put these companies out of business.

Related posts:

1. Avoid Foreclosure: 7 steps to save your home.
2. Loan Modification Company Scams How to Avoid Them
3. Avoid Foreclosure With A Personalized Home Loan Modification

Related posts:

1. Avoid Foreclosure: 7 steps to save your home.
2. Loan Modification Company Scams How to Avoid Them
3. Avoid Foreclosure With A Personalized Home Loan Modification

Housing counselors, who've received more than $400 million in federal funds to help mitigate the mortgage crisis, are helping troubled homeowners avoid foreclosure and lower their monthly payments, a study released Wednesday has found.

Giving troubled borrowers yet another way to avoid foreclosure, Fannie Mae said on Thursday it would allow eligible homeowners to rent their own homes.

The incentives mortgage servicers receive for managing a home loan are a significant obstacle to loan modification that would help financially troubled borrowers avoid foreclosure, according to a new report from the National Consumer Law Center.

So you're in default on your mortgage. You've several months behind on your payments. You've tried and failed to get a loan modification and work out a repayment schedule, and foreclosure is looming. Should you consider declaring bankruptcy?

So you're in default on your mortgage. You've several months behind on your payments. You've tried and failed to get a loan modification and work out a repayment schedule, and foreclosure is looming. Should you consider declaring bankruptcy?

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