If you have suffered financial hardship, you may be having difficulty paying your mortgage. After three months of delinquent payments, your lender can begin foreclosure proceedings on your house. If you are in this situation, you need to know that you have rights and options, like getting a loan to stop foreclosure, that can help you save your home.
At Moshes Law, P.C. experienced foreclosure attorneys will review your case and help you choose which loan option is best for you and your situation. Do not face foreclosure proceedings alone. Contact Moshes Law, P.C. today for a free consultation.
Is It Possible to Get a Loan to Stop Foreclosure?
Yes, you can get a loan to stop foreclosure. There are several options available for loans to stop foreclosure on homes, even if the homeowner has delinquent payments or bad credit on their credit score record.
There are several loans and options available for homeowners facing foreclosure including:
- Refinance loans
- Loan modifications
- Mortgage forbearance
- Reverse mortgages
Some homeowners may be entitled to financial assistance from various government agencies that assist those going through financial hardships. If you are unsure which loan or payment option is best for you, it is recommended that you consult with a lawyer who has experience with foreclosure proceedings.
Refinancing Your Loan to Stop a Foreclosure with a Mortgage
A foreclosure occurs when a homeowner cannot pay their monthly mortgage payment. After several delinquent payments (usually more than three months in a row), a lender can either begin foreclosure proceedings or sell your loan to a collection agency.
If you want to stop the foreclosure proceeding, you will need to fulfill your financial obligations to your lender and get your account current. If you are behind on payments, this may be difficult without mortgage loans to stop foreclosure. If a homeowner has a bad credit score and negative marks on their credit report due to delinquent payments, they may find it is difficult to get approved for a mortgage loan and will usually face a higher interest rate if approved. It is important to research all your options before committing to a mortgage loan.
A refinance loan is typically a good option for homeowners who need a loan to stop foreclosure. When you refinance your mortgage, you are taking out a loan with a new lender to pay off the original lender. Refinance loan terms often make it easier to afford monthly payments by spreading them out over more time or reducing interest rates. With a refinance, even though your monthly payments are lower, you will typically end up paying more for your home in the long run.
In addition to a traditional refinance loan, two other refinance options include a short refinance and a hard money loan.
- Short Refinance- With this type of loan, the lender agrees to forgive some of the debt and refinance the remaining debt into a new loan.
- Hard Money Loan- High-risk borrowers with bad credit are often not eligible for traditional loans and may need to contact a private lender to get a hard money loan to stop foreclosure. These loans often have an extremely high-interest rate and are based on property value. Even though the loan terms are very unfavorable to the borrower, a hard money loan can help buy you enough time to stop a foreclosure and save your home.
If a homeowner is over the age of sixty-two and has equity in their house, instead of a refinance loan or hard money loan, a reverse mortgage may be a more appropriate option. A reverse mortgage allows a homeowner to pre-sell their home equity to cover the delinquent mortgage payments.
The reverse mortgage lender will own the home equity; however, the home remains in the homeowner’s possession, and they are allowed to continue living at the property. Once the homeowner passes away or moves, the reverse mortgage lender will take possession of the house.
The Federal Housing Administration (FHA) offers one of the most popular reverse mortgage programs called the Home Equity Conversion Mortgage (HECM) program. To be eligible for this program, you must meet a list of eligibility requirements. To learn more about these requirements and to find out if you’re eligible for the HECM program, you should contact a HECM counselor.
Homeowners should be aware that a reverse mortgage may disqualify them from certain public benefits like Medicaid. To learn about reverse mortgages and how they can help you or affect your benefits, read this article from New York State’s Department of Financial Services.
Obtaining Loans to Stop Foreclosure
Obtaining an emergency loan to stop foreclosure may be challenging if you have bad credit, but knowing which providers work with homeowners with low credit scores is key information.
- Lending Tree- Lending Tree specializes in peer-to-peer lending and helps borrowers looking for a mortgage loan to stop foreclosure match up with potential lenders. Lending Tree can use your basic information to match you with offers for different types of loans like refinancing loans and reverse mortgages.
- FHA Rate Guide- The Federal Housing Administration is not a lender, but it does provide a generous amount of information about lenders who provide FHA loans.
- Wells Fargo Home Mortgage- Wells Fargo has loan options to fit the needs of homeowners in a variety of situations. They have options for refinancing loans or loan modifications.
- Bank of America Mortgage- Bank of America is another lender that can provide a homeowner a loan to stop foreclosure. Bank of America works with the FHA, so some loans are even guaranteed by the FHA. If you are an existing Bank of America customer, mortgage forbearance may also be an option.
- CitiMortgage- CitiMortgage provides customers with various loan options like modifications, forbearance, short sales, and deed-in-lieu of foreclosures.
Several government agencies provide programs for homeowners who face losing their house but are not eligible for a loan to stop foreclosure. If you have been denied all other loan options, check out one of these programs:
- HUD Foreclosure Avoidance Counseling
- Homeowner’s Hope Hotline
- Court-approved credit counseling agencies
- National Council of State Housing Agencies
For more information about these various programs and other options that you have if you are in foreclosure proceedings, read about New York State’s Department of Financial Services Alternatives to Foreclosure.
Beware Of Scams
If your home is in foreclosure proceedings, you may feel desperate and rushed to make a decision or accept a quick loan. Beware, this industry is known for scams, and you need to do your research to ensure that a fraudulent company isn’t trying to take advantage of your serious situation.
To avoid falling victim to a scam, it is best to consult with an experienced foreclosure attorney. The lawyers at Moshes Law, P.C. can guide you through the foreclosure process and educate you about legitimate options to either save or sell your home.
To learn about your options and receive guidance to make an educated decision, contact Moshes Law, P.C. today for a free consultation.
What is A Foreclosure Bailout Loan?
A foreclosure bailout loan is a high-interest rate loan to stop foreclosure. Under this loan option, a bailout loan lender will pay off the existing mortgage and execute a new loan with the homeowner.
Bailout loans will temporarily solve your foreclosure problem, but often this type of high-interest rate loan causes more financial problems in the long run. Your monthly payments may end up being higher than with your previous loan and if you fall behind on payments again, you will face another foreclosure.
If the previous loan options don’t work for your situation, you don’t need to worry. There are additional routes that a homeowner facing foreclosure can take.
If a stop foreclosure loan isn’t an option for you, you may want to consider selling your home in a short sale to avoid foreclosure and save your credit score. Short sales require the approval of a lender and typically this sale will only be approved if the purchase price exceeds what a lender could get from a foreclosure sale.
In certain situations, especially if your mortgage isn’t the only loan you have defaulted on, bankruptcy might be your best option to manage the debt you are under. While bankruptcy will severely negatively impact your credit score, it will delay the foreclosure process and give you enough time to make other living arrangements. A bankruptcy will also relieve you of any other debts that may be causing financial hardship and provide you with a much-needed fresh start.
Deed In Lieu
Another way to avoid a foreclosure is a deed in lieu of foreclosure negotiation. A deed in lieu allows a homeowner to turn over the deed of the property to the lender to avoid foreclosure. To be eligible for a deed in lieu of foreclosure, you must not be able to sell your home before foreclosure.
A loan modification is a way to refinance your mortgage to extend the term of the loan or lower the interest rate to reduce monthly payments. Some lenders will even negotiate with a homeowner to set a monthly payment that fits the individual’s budget. A loan modification is usually temporary, and the lender will expect the normal loan terms to begin once a person’s financial situation has improved.
Where To Get Lawful Help with Foreclosure
Facing a foreclosure is one of the worst situations a homeowner can endure. It is normal to be stressed, anxious, and in serious need of information and guidance. If delinquent payments have caused you to default on your mortgage and you are faced with foreclosure, you must know that you have options.
You may ask yourself, “Can I get a loan to stop foreclosure?” and the answer is yes. There are several loan and refinance options available to homeowners even if you have bad credit or are dealing with a collection agency. If you do not qualify for a loan, you may also seek relief through government agencies like the FHA.
Do not face a foreclosure alone and do not feel pressured into taking a high interest rate loan and falling victim to a scam. Contact Moshes Law P.C. today to schedule a free consultation with an experienced foreclosure attorney. The lawyers at Moshes Law will evaluate your case and help guide you through the foreclosure loan process so you can make the best and most informed decision about your home and your future.