Posts Tagged ‘foreclosure homes’

With the unemployment rate in the U.S. rising to 10.2% in October the foreclosure homes rate is still increasing. The foreclosure crisis has affected almost 940,000 properties between July to September, compared with 890,000 in the previous quarter, and a 23% increase from the third quarter of 2008. According to RealtyTrac, if this trend continues, foreclosures could exceed 3.5 million homes this year, compared to 2.3 million homes last year. The stress that this foreclosure homes rate places on the economy is considerable.

With home foreclosure rates probably rising well into early 2011,it is important for homeowners to be educated about how they can prevent foreclosures. Though the Federal Government’s $75 billion loan modification program has achieved its goal of beginning trial loan modifications for 500,000 financially troubled homeowners, there are many millions of homeowners still at risk.

Though many lenders consider troubled homeowners for a mortgage modification to avoid foreclosure, more borrowers could face foreclosures as their moratoriums end. Homeowners should be given the help needed and the opportunity to keep their homes. The loan modification process can be very confusing for homeowners. Unfortunately, there are no real set parameters that qualify a homeowner for a modification.

At present, many banks are taking between six months to a year to make a decision on a mortgage modification application. Quite often, after waiting for such a long period, the loan modification request is denied and the desperate homeowner has to eventually face foreclosure. Homeowners who apply for loan modifications should first understand what the process entails. Loan modifications can affect your credit rating by deducting 50-100 points. If your financial situation is only temporary, modification may not be your best option since it would be most likely difficult to rebuild your credit.

To prevent a foreclosure, borrowers should contact their lender to discuss foreclosure prevention options as soon as they realize they have a mortgage payment problem. The longer they wait, the fewer options they will probably have. Troubled homeowners should also be wary of foreclosure recovery scams and educate themselves about their mortgage rights and foreclosure laws and time frames in their state.

The best way to stay in your home with an affordable payment is to honestly assess your current situation and determine along with your loan officer what steps are necessary to qualify for a refinance. A refinance has set parameters that have to be met in order to qualify, which helps your loan officer determine what needs to be done to make the refinance a reality.

While today mortgage loan officers are swamped with inquiries from troubled homeowners you should be determined to save your home and insist on a meeting to discuss how you can meet refinancing requirements. The good news is that due to the size of the national foreclosure homes problem banks have learned the hard way how expensive the foreclosure process and managing a portfolio of foreclosed properties can be. Banks and other mortgage lenders are now at least a little more receptive to a loan modification than they were a year or two ago.

Tweet This Post