Stop Foreclosure, Save Your Home, Refinance at 90 LTV of Current Market Value Using FHA Financing

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I have been approached by a swarm of homeowners who are currently facing foreclosure. It saddens me to see so many people in this situation, and how they have been deceived into thinking they can afford these homes. Even until now I hear stories about homeowners being promised false hope that they can be saved from foreclosure by paying a short sale fee, loss mitigation fee, or just being striped totally of their equity by scrupulous professionals.The fact of the matter is that you can save yourself from foreclosure; because you don’t have many options.
The first thing homeowners in trouble have to come to realization is to separate their emotional attachment to their home if they have owned it for less than four years. I say that because if you bought your home within the last four years most likely you bought really high priced and most of these homeowners bought with a 100% financing with no income verification. If this is the case you must realize you have no equity and your house isn’t worth keeping. What I recommend is a family meeting putting together a budget; net Income minus all expenses and if you’re in a negative forget it! cut your loses and move on its not too late to start over.Refinance may be an option with the new FHA guidelines that go into affect October 1, 2008 this where homeowners that are behind on their mortgage can refinance only if they can prove that their income is sufficient to pay the mortgage at 29% of their income, and only if their current lender agrees to take a loss (short Pay) on the current mortgage FHA will purchase the current mortgage up to 85% of current Fair market value with closing cost and debt all bagged together not to exceed 90% of current fair market value. You can visit their website at and search for the HR 3221 housing bill for full description of bill. Please remember this is a full documentation loan it will not work for people who cannot prove their incomes!After you realize you can’t afford it and refinancing couldn’t help you call your lender don’t be afraid bottom line you can’t afford it. your lender must see that you can’t afford it so you have to lay the cards on table with them period give them all the truth once they see you can’t afford it obviously a payment plan won’t work. The lender may offer you loan re-modification if your income proves that you can pay the new loan terms so you see why I say sometimes its better to come to reality and forget the emotional attachment we have for homes. Most lenders offer forbearance which is deffer payments for up to six months but again if you still have the same income in six months it defeats the purpose.Option 4 is to put the house on the market to sell at current market value hire a Realtor to give you a free market data analysis if you list with them most likely your home won’t be worth what you bought it for, so its important that you maintain communication with your lender during this process, so they can at least see that you are trying to get yourself out the hole, plus they will pause foreclosing procedures during this time. Once the Realtor gives you the market value send a copy to your lender as they have to agree to take a loss; this is called a short sale. During this time make sure you save your money to start looking for accommodations to move out don’t get too comfortable. It surprises me how many people wait til the sheriff is knocking on their doors before they reality actually hits home.If after a few months the property doesn’t sell you have the right to claim Chapter 13 Bankruptcy. Just keep in mind that if you file chapter 13 its only temporary, if you can’t afford your current mortgage chapter 13 won’t help you as now you will have to pay your regular mortgage payment and all of your debt consolidated in another payment to the state trustee so now you will have two payments. Notwithstanding the enormous fees you will pay an attorney. Chapter 13 is for individuals who can prove they will be able to pay their current mortgage plus all arrears in a payment plan over 5 years.If Chapter 13, Selling, Refinancing, short selling, forbearance, payment plan, loan re-modification, don’t work out for you just give it up ask your lender if they have cash for keys ask for a couple of months to move out and you will voluntarily give them the deed in lieu of foreclosure, it’s certainly less embarrassing than the sheriff forcing you and your family out.Just remember during these tough times we fail to think straight and anyone who offers us a sign of hope will look like a god; but reality is you can save your own home if you just talk to your lender and come to realization if you can truly afford to keep this home even if the lender works with you.I can’t stress to how important it is to communicate with the lender, they will offer the options that they will offer any body else you hire to do it for you. Don’t fall into a trap just tell your lender the exact truth be bold and un-embarrassed tough times could happen to any one of us and it’s never too late to start over. Take it from me I have walked the path and I have helped hundreds some I saved their homes and the others just gave them up gracefully and started a new chapter in their life.After all is said and done just educate yourself on credit repair as your starting point.


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