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The options besides loan modification to help prevent Foreclosure
Every day you are likely hearing advertisements for loan modifications, but there are other options available that you should at least consider depending upon your situation.
Forbearance: a written agreement between you and your lender allowing you to either suspend or reduce monthly payments for a period of time until you are able to make payments to bring the loan current.
Ask your lender if interest will continue to accrue during this period. The answer is likely yes. It means you will owe more money over the life of your loan, but will get a bit of a reprieve until you are able to make payments again. If you are behind on your mortgage it may be worth asking if you can forbear your current monthly payment while you catch-up on your late payments. However, your monthly payment will likely be hirer over the remainder of your loan because of the accrued interest.
Repayment Plan: A repayment plan is used after you fall behind on your monthly payments. You and your lender agree that you will pay the past owed amount in monthly installments in addition to your monthly payment.
However, you have to ask if I fell behind in my monthly payments will agreeing to pay more per month really get my caught up on my payments.
Short Sale: A short sale is an agreement between you and your lender where you sell your home and the lender agrees to accept the amount you sell it for (assumed to be less than the amount owed on the mortgage).
There may be tax consequences to engage in a short sale, both for selling your property and for the loan forgiveness.
Deed-In-Lieu/Walking Away/Jingle Mail: You voluntarily give up title of your home to the lender in exchange for loan forgiveness. Thereby saving you and your lender (more your lender) the burden of going through the foreclosure process.
Military Relief: If you are a member of the military you have additional rights and protections under the Servicemembers Civil Relief Act and/or the California Military Families Financial Relief Act.
There are still a few other options available if your mortgage is an FHA loan or a Frannie or Freddie owned loan.
Regardless of who you talk to about your mortgage ask to hear about all the available options to you so you can make an informed choice.
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