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I've Defaulted on My Mortgage and am Afraid of Foreclosure--What Can I Do?

 

Even in this tough economy, homeowners facing foreclosure and other mortgage problems still have a variety of options available to them. Here is a quick list of possible solutions:

Contact Your Mortgage Lender Immediately

Contrary to popular belief, mortgage lenders do not want to own your home. In fact, a recent study by the Mortgage Bankers Association estimated a lender's loss to be almost $50,000 per foreclosed home, and sometimes as much as thirty to sixty percent of the outstanding loan balance. By contacting your lender, you may be able to work out the existing terms of your mortgage in hopes of bringing your mortgage payments current. In other cases many mortgage lenders are now considering borrowers eligible for loan modification.

Seek Government Help to Refinance Your Mortgage

Due to the recent rise in foreclosures, the government has responded to the fact that many homeowners are unable to refinance their current mortgage. The Home Affordable Modification Plan was recently created to address the growing number of individuals having trouble making their mortgage payments. This program allows eligible homeowners to lower their payments to 31% of their gross income with reduced interest rates, 30-year to 40-year terms, and in some cases dropping the principal balance.

Save Your Home Loan with the Right Foreclosure Avoidance Information

The U.S. Housing and Urban Development funds a wide variety of housing counseling throughout the nationwide. These housing counselors can help explain possible mortgage options, examine your finances, and even represent you in negotiations with your existing mortgage lender. HUD certified counselors and local foreclosure resources can be found on their web site directory available HERE.

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