Freddie Mac Reports Homeowners Late in Seeking Home Assistance
According to a report recently published by the Federal Home Loan Mortgage Corporation or Freddie Mac, very few distressed homeowners contact their lenders when having problems with their mortgage debt. The reason behind this lack of action is their belief that lenders are only after their homes.
On the contrary, many lenders would rather work out an agreement with the troubled borrowers than foreclose. In addition to the savings in foreclosure costs that the lenders will enjoy, it will also be less inconvenient for them.
If you are among the millions of homeowners who are laboring under this false belief, it is time that you put your mortgage problem in perspective. There are actually many alternatives to foreclosure that you can consider including:
- Repayment Arrangement
- Loan Modification
- Deed in Lieu of Foreclosure
- Short Sale
All these options will effectively stop foreclosure. However, you should make sure that all terms and conditions of the agreement will be in writing. This will protect you from any misunderstanding and confusion.
You should also keep in mind that many lenders will have to agree to all the terms and conditions included in the agreement. This means that during the negotiation, things like junior liens are discussed.
For the short sale option, you should know that there are certain requirements that should be met before the lender agree to this particular option. These include missed mortgage payments for at least two months and proof of financial difficulty.
Since facing foreclosure means being under time pressure, you will have to determine as soon as possible which option is ideal for your situation. It would be best if you scrutinize your finances and prepare the necessary documents before you head to your lender to discuss your foreclosure options. Lastly, you should not wait until the last minute to communicate with your lender.