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Foreclosure in USA

A foreclosure means your lender can dispossess you from your home and you are asked to move out of your house. Additionally, if your property is worth less than the total amount you owe on your mortgage loan, your lender or the U.S. Department of Housing and Urban Development (HUD) could sue you for the deficiency judgment. And, in that case, you may not only lose your home, but also you will be asked to pay an additional debt that owe to your lender or to HUD.

So now, you must be thinking what one should do to avoid a foreclosure. One can consider the following options:-

  • DO NOT IGNORE THE LETTERS FROM YOUR LENDER: - If you are facing problems making your payments, call or write to your lender without any delay. Clearly explain your situation. Be prepared to provide them financial information, such as your monthly income and expenses. Without such information, they may not be able to help you. Stay in your home as you may not qualify for assistance if you abandon your property.
  • CONTACT A HUD APPROVED HOUSING COUNSELLING AGENCIES:-These agencies are valuable resources of information. They contain and offer information about services and programs offered by Government agencies as well as private and community organizations. The housing counseling agency may also offer credit counseling. These services are usually free of charge.
  • SPECIAL FOREBARANCE:-The lender may be able to arrange a repayment plan which would be based upon your financial situation and may even provide for a temporary reduction or suspension of your payments. You may qualify for this if you have recently experienced an involuntary reduction in income or an increase in living expenses. You should also furnish information to your lender showing that you would be able to meet the requirements of the new payment plan.
  • MORTGAGE MODIFICATION: - One can refinance the debt and or extend the term of mortgage loan. This will help one to catch up by possibly reducing the monthly payments to a more affordable level. One can qualify if have recovered from a financial problem even if net income is less than what it was before the default (failure to pay).

Foreclosure or a deficiency judgment could seriously affect your ability to qualify for credit in the future. Therefore, you should avoid it as much as it is possible.

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