Consumer Credit Counseling Service - Solution
I'm facing foreclosure - What are my options?
If you are behind in your mortgage payment or think that you will become delinquent on your mortgage, talking with your lender may be the last thing you want to do. Most borrowers facing foreclosure are frightened and feel less intimidated talking with a housing counselor. Our certified counselors can help you address the underlying issues that are keeping you from making your payment on time. Moreover, they can facilitate communication between you and your lender. More importantly your counselor can help you understand your options and offer long-term solutions.
If you are unable to pay your mortgage payment, the first thing to do is call your lender. Then call your local housing counseling agency, such as CCCS, to discuss your options and receive assistance with your proposal to the lender.
Depending on your situation and circumstances, the following options may be available to you:
- Forbearance-The lender might postpone legal action and work out a repayment plan that is affordable for you.
- Repayment Plan-The lender will allow you to pay extra each month until you are caught up.
- Note Modification-If you have an adjustable loan, the lender might freeze the interest rate before it increases, drop the interest rate, or extend the amortization period.
- Refinance-If you have sufficient equity, the lender could add the back payments to your loan balance.
- Partial Claim-There is certain government loans which contain provisions that allow you, if you meet specific criteria, to apply for another loan, paying back the missed payments.
- Reinstatement-Within a limited timeframe, you are able to bring mortgage payments current, pay attorney fees and stop foreclosure.
- Sell your home
- Pre-Foreclosure Redeem or Short Sale. A short sale will negatively affect your credit, but not to the extent as a foreclosure would. Best used when home is worth less than what you owe.
- Deed-in-lieu of foreclosure- You could deed the property back to the lender, and the lender could forgive the mortgage. This option affects your credit the same as a foreclosure would.