SAHBA Home Hints
July 20, 2008
Homeowners Breaching upon Foreclosure have Options
When delinquent mortgage payments reach 90 days, homeowners have crossed the technical line of foreclosure. Homeowners in this predicament do have options, and working with their lender is the best place to start.
“Lenders are doing everything they can to avoid incurring homes from borrowers,” said Greg Renkenberger, National Sales & Marketing Manager at Imortgage.com.
Renkenberger says lenders aren't looking to gain property via foreclosures. To help themselves and their lenders, homeowners should take action as soon as possible if a mortgage payment is missed.
Lenders may be willing to negotiate with homeowners. Creation of a workout plan or forbearance could help borrowers stay in their home. Forbearance can allow borrowers to pause payments for a certain amount of time. Missed payments can be added to the end of the mortgage's life or the missed amount can be added to another month.
Loan modification may be an option too. Sometimes lenders may agree that a lower interest rate will enable borrowers to continue to pay their mortgage. Refinancing also can change the terms of a loan. To refinance, borrowers take out another loan to pay off their current loan.
When payment adjustments are not enough, selling is another way to stop foreclosure. Homeowners who can no longer afford their property may want to put their house on the market. Lenders may accept a price that is less than what is owed by using a short sale.
These are a few options that can keep borrowers from going into foreclosure. Giving the home back to the lender and bankruptcy also are options, but lenders are doing everything to help their borrowers avoid them.
A lender's lawyer can file a foreclosure lawsuit after three payments are missed. The options mentioned still can be utilized at that point, but early action is advised because the process takes time. Borrowers opting to reinstate their loan will have 90 days to bring their payments up to date and pay any additional related costs or fees.
Most importantly, Renkenberger stresses communication with lenders throughout the foreclosure process.
Borrowers can contact the U.S. Department of Housing and Urban Development (800-569-4287) or the Homeownership Preservation Foundation's Homeownership HOPE hotline (888-995-HOPE) for questions or assistance.
Details: Renkenberger at 520-225-6875.
SAHBA represents about 750 member businesses and 40,000 jobs serving the residential construction industry in Pima and Cochise counties.
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