U.S. Plan Helping Homeowners Avoid Foreclosure: The foreclosure process and the mortgage assistance process may take place simultaneously. Be sure to work closely with your lender, counselor and Realtor. We'll explore every mortgage assistance option that may make the difference and help you keep your home.
Homeowners across the United States could avoid foreclosure under a plan announced on Nov. 30 by the U.S. Treasury Department. Under the plan, millions of at-risk homeowners could be free of mortgage debt without going through foreclosure, and given $1,500 for relocation.
Avoid Foreclosure Lender And Homeowner Incentives
The Treasury plan, which applies to 75 percent of the mortgages in the U.S., including those backed by Freddie Mac or Fannie Mae, provides incentives for lenders and homeowners for completing short sales - transactions in which the lender agrees to a sale price that's less than the borrower owes on the mortgage. Short sales are preferred to foreclosure because homeowners take less of a hit on their credit and lenders realize a smaller loss
However, short sales often get bogged down because of the complicated nature of the transaction. Deals can fall through because they take too long.
Under the plan, which speeds up and simplifies the short-sale process, mortgage servicers have 10 days to approve or reject a request for a short sale. And when the sale is done, the borrower must be fully released from the debt. Refinancing may be the best option if you are current on your monthly mortgage payments. If you are behind due to a temporary hardship, a repayment plan helps you catch up once your finances are back in order. A foreclosure is hard on everyone involved, including the lender. Do you homework well, act quickly, and try maintain a positive posture to make it easier on your family and everyone trying hard to help.
Avoid Foreclosure By NOT Taking Out A Second Mortgage On Your Home
Millions of homeowners took out second mortgages on their home during the housing bubble. It’s estimated that as much as a quarter of all mortgage debt in the United States is in the form of second mortgages. Some of these loans were taken out to finance home improvements; others were part of a subprime product known as an "80/20 mortgage," in which 80 percent of the purchase price was covered by a first, adjustable-rate mortgage, and the remainder by a second mortgage, often with a much higher interest rate. Homeowners all to often fail to see what that higher interest is going to cost them in the long run.
It's Your First Home Mortgage That Counts
Second mortgages may have given the banks a loophole in fulfilling their obligations under the National Mortgage Settlement: each dollar a bank forgives goes toward fulfilling its obligation under last year’s settlement. But many lenders have made it a point to almost exclusively modify secondary loans while all but ignoring the troubled, larger primary mortgages. This may meet a statistic that gets by without closer scrutiny. It’s a real problem: when it comes to keeping your home, it’s the first mortgage that counts.
In Foreclosure, Holder Of Second Loans Often Get Nothing
Why would a bank forgive a second mortgage completely but move forward with foreclosure on the first mortgage?
Surprisingly, such a tactic often makes sense for banks. When a lender forecloses on a first mortgage, the house that fell into the Minnesota foreclosure time line is generally sold at auction. If the house underwater, the bank gets only part of its money back. Not only that - but after the home is sold at auction, there’s no asset left to pay off any of the second home loan. The holder of that second loan — which has lower priority than the holder of the first — ends up with nothing. So a lender can forgive a second mortgage — which in the event of a Minnesota home foreclosure would be worthless anyway — and under the settlement claim credits for “modifying” the mortgage, while at the same time it or another bank forecloses on the first loan. The really damaging result, is that the people the settlement was designed to protect, the homeowner, still lose their home and have to move out.
Simplified Short Sales in U.S. Plan
Simplified short sales are better than a home foreclosure - however, generally the homeowner still has to move out.
The announcement is a positive step for the real estate market and for communities across the country, RE/MAX International CEO Margaret Kelly says. RE/MAX has been advocating simplified short sales for more than a year and has been working actively with U.S. government officials, including legislators and Obama administration officials. At a Senate Banking Committee hearing on February, Senator Elizabeth Warren, Democrat of Massachusetts, called on regulators to take tough enforcement actions and not settle for negotiated agreements with banks that miss taking actions that are best for the vulnerable homeowner. To do that, the government must clearly require that relief be given in the form of first-mortgage modifications, which are far better for the homeowner than a short sale.
We're extremely pleased with this development," Kelly says. "Foreclosures have played a major role in keeping housing values down. This will help the market return to normal, stabilize prices, improve neighborhoods and prevent hundreds of thousands of homeowners from suffering the agony of being evicted from their homes. It should also play a role in the continued recovery of the economy."
There Is Help - Take Action Now
Jenna Thuening has been trained and certified as a Distressed Property Expert to help homeowners avoid foreclosure by offering courses on short sales. More than 8,300 RE/MAX Affiliates hold the Certified Distressed Properties Expert (CDPE) designation – 58 percent of the total U.S. CDPE-holders. The government has trained CDPE's with extensive experience with foreclosures and pre-foreclosures. If you've fallen behind in your mortgage payments or received a pre-foreclosure letter from your lender, Jenna Thuening of Home Destination can help.
Certified Distressed Property
Certified Distressed Property Experts (CDPE) can help bring extraordinary results. Jenna Thuening respects and understands your circumstances and can help you find your best options when facing a foreclosure or short sale.
Buyer Investment & Opportunities
At the moment, the many foreclosures mean that in the majority+ of the country, it's a buyer's market, including the Twin Cities. That means that more houses are for sale, stretches on the market are longer, and prices have bottomed. Learn how to avoid foreclosure US plan.
Real Estate Foreclosure News
Follow Jenna Thuening's to best understand new and existing opportunities; you have more choices than you may be aware of. We offer current economy and foreclosure local news updated regularly by Home Destination.