What are your Options?

[JacMac]

Options To Retain Your Home:

The following options will result in you retaining ownership of your property.

1. Repayment Plan: This usually involves establishing a schedule with your Lender to make a full regular monthly payment plus a little extra each month, to repay the delinquent amount over a specified period of time.
2. Special Forbearance Plan: This option may provide for a temporary reduction or suspension of payments, that will be increased at a later point to repay the delinquent amount over a specified period of time.
3. Mortgage Modification: This option may allow you to refinance the debt and / or extend the term of your existing mortgage loan.
4. HUD Partial Claim: If your loan is an FHA insured loan, your lender may be able to obtain a one time payment from the FHA-Insurance Fund to bring your mortgage loan current with payments.
5. Refinance: This option may allow you to use the equity that you have established in your home to pay the delinquent amount. Depending on the interest rate of your new loan, your monthly payments might be reduced. You can explore refinancing with your existing Lender as well as with any Lender of your choice.
6. Homeowners’ Emergency Mortgage Assistance (IN PENNSYLVANIA): This option provides special financial assistance in Pennsylvania to residents who are facing the possibility of losing their primary residence through foreclosure. Depending on the Homeowner’s situation, they may be eligible to receive a LOAN to bring their mortgage payments current. Homeowners, depending on their circumstances, may also be eligible to receive financial assistance with their monthly mortgage payment for up to 24 months from the date the mortgage became delinquent.

Options To Dispose Of Your Home:

In situations where you do not want to retain ownership of the home, the following disposition options may be available as an alternative to Foreclosure. These options affect your credit rating less than a Foreclosure will.

1. Sell The Home: If there is sufficient equity in the property, you may be able to receive more for your property than what is due on the mortgage loan.
2. Assumption: With this option, you would sign over the property to another person. That person would then take possession of your home, and take over making the payments.
3. Pre-Foreclosure Sale: This option may allow you to sell your property for an amount less than what is necessary to pay off your mortgage loan.
4. Deed In Lieu Of Foreclosure: This option may allow you to voluntarily "give back" the property to your Lender without further damaging your credit

[tryinhard71]

Are there any reputable companies out there that will refinance after the foreclosure process has begun? I'd like to try a refi, but don't want to end up in the same situation.

The question is what caused the foreclosure...i.e. was it adjustment of the ARM, or was it prior to the adjustment? What kind of loan? What was the hardship involved? Who is your lender/servicer? What action did you take prior to the NOD and Foreclosure proceedings? What state are you in? What is the value of the property and amount of the Loan? Any additional question that you could answer would help.

[tryinhard71]

I had a couple of lates (i.e. w/in 30 days) before the adjustment, but the adjustment is what led to the foreclosure. I was on a 2 year arm originally with Aames Home Loans, apparently sold to Wilshire Financial, then I got notice that it was being serviced by Homeq...Deutsche is named on the court papers, but I can't find any record of them as deed holder in my county records. I am located in Illinois. didn't take any action to modify or create a payment plan prior to the foreclosure. The loan is at $370,000 and the property is probably only valued at $400,000. Any information you can give is most appreciated.

Just a couple of hours ago, family member has offered to give me the money to cover the arrears $25,000, and then either co-sign on a refinance or buy the property from me in order to allow me to stay in and pay them rent each month. There is a court date set for less than 2 weeks from now for a judgment of foreclosure, set a sale date, etc. If I were to pay the full amount in arrears before that date, would that stop the foreclosure? Or could they still continue the proceedings? Also, not sure if re-fi with a co-signer w/ great credit would have any impact. Needless to say, my credit is trashed as a result.

[tryinhard71]

Another quirk here is that I was never served with any court documents. The mortgage companie's attorney had them served at my parent's house out of state. I have never resided at that address, but had a car registered there, which is probably where they got the address (since they have access to credit reports), so it seems this would be a reason to get the case thrown out otherwise.

The problem is that the family member is doing a Bail Out and it is Non Arms Length Transation, we do not allow that in the lending industry. The next issue is that a co-signer will not solve the problem either we are not allowing co-signers that have never been on title to effect the Bail Out either. FNMA and FHA have come down real hard on these issues.

That is something that you have to know up front, neither of those solutions will help you out of this loan. You do need to bring it current and get out of Foreclosure. The Deutsche Bank thing is being repeated all over the country and even they may not own the Note and Deed of Trust. They were sliced and diced out to everyone and their mother's uncle on these securitization sales of CDO's. There are some cases in Ohio where the judges threw the foreclosures out of the court as no one could identify who actually owed the Mortgages. That is not something you should hang your hat on, but they used very good attorneys that were able to have the cases dismissed for the time being and that is the operative word(s), time being. The fact that you were not constructively served....attorney time, that is a question for an attorney.

You need an attorney, a good, fierce and frankly nasty attorney to assist you in this if you wish to pursue it. They will have to be very experienced in this type of issue and a true litigator.

One word to the wise, you need to be quite careful ---the lenders are not allowing family members to do the Bail Outs, if it is caught then lender is taking rather firm responsive steps if they encounter this activity, Brokers will say sure, we can do it, the Lenders if they find it are not real pleased. We are very careful these days and are able to determine the issues of Bail Out and Non Arms Length Transactions.

Now depending on where you are located in the US, and if you were current the prior 6 months preceding adjustment....the FHA Secure Program may help you. You must have been current 0X30 the 6 months prior to adjustment, have fairly good consumer credit during that time. The FHA limits must allow the loan amount...that is why I ask the State and County to look that up. The problems after adjustment are taken into consideration as a function of the adjustment and this is what the program is intended to assist. So the Foreclosure activity and the credit after the adjustment are not of serious material concern. The consumer credit is reviewed, however the mortgage credit is allowed to have deteriorated. So if you could please tell me what State and County you are in I can look that up. Additionally the program requires that you meet a 41% DTI with not much higher allowed than 43% in extenuating and compensated cases.

[janicem]

[QUOTE=JacMac;6295]Options To Retain Your Home:

The following options will result in you retaining ownership of your property.[LIST=1][*]Special Forbearance Plan: This option may provide for a temporary reduction or suspension of payments, that will be increased at a later point to repay the delinquent amount over a specified period of time.[*]HUD Partial Claim: If your loan is an FHA insured loan, your lender may be able to obtain a one time payment from the FHA-Insurance Fund to bring your mortgage loan current with payments.

Does anyone have any experience with HUD's Special Forbearance Plans and/or Partial Claim? I understand from reading HUD's FAQ's that you can combine a Partial Claim with a Special Forberance Plan. Since a Partial Claim is essentially an interest-free second mortgage, how would this impact your credit rating and/or ability to get another mortgage in the future?

The only partial claims being paid presently are in FEMA disaster areas, they are not presently being used in the loss mitigation process with FHA unless there are very and extreme mitigating, extenuating and compelling circumstances, death of a primary wage earner, serious illness of a primary wage earner, loss of employment regionally and that is about it. Otherwise they are not utilizing this process for the general loss mit process, neither at the FHA level or the Servicer Level and the rules surrounding Partial Claim are very strict and require very stringent tests to be applied by the Lender and validated by FHA.

A partial claim is not an interest free second mortgage it is an amount of money, the arrearage required to be paid back to the lender over a very specified period of time in conjunction with the regular mortgage payment. The borrower must prove that the hardship is over, not continuing and have significant and supporting documentation to do so. The partial claim must be repaid by the lender as the borrower repays the arrearage to FHA.

Any forbearance program is considered as reported by the credit agencies as foreclosure in the eyes of the underwriter and FHA guidelines....Forbearance only occurs after a period of time that would be considered NOD periods of time, i.e. greater than 90 days...anything reporting in excess of 90 days is reviewed in the underwriting process as foreclosure activity and therefore foreclosure whether perfected or not.