Every situation is different and every lender is different, but there are several alternatives available to homeowners seeking to avoid foreclosure.

LOAN MODIFICATION
A loan modification is a change to the original terms of your mortgage through one or a combination of the following methods:

  • An adjustment of your interest rate in order to lower your monthly payments
  • An extension of the term or life of your mortgage (ex: from 30 to 40 years) in order to lower your monthly payments
  • An addition of delinquent interest to the current unpaid principal balance

NOTE: Loan modifications require prior approval from the loan’s investor and a loan modification fee. A cash payment toward any loss to the investor may also be required and the homeowner may be asked to comply with other additional requirements from the lender/investor.

TOTAL REINSTATEMENT
Total reinstatement involves bringing your loan current with a single payment. You will be required to provide a certified check in an amount which includes all past due payments, late charges and fees that have been assessed to your account.

RE-PAYMENT PLAN
Some lenders will allow the homeowner to repay the past due amount over a period of months by paying a full payment plus a partial payment on the past due balance.

FORBEARANCE PLAN
A forbearance plan allows the homeowner to reduce or suspend payments for a period of time, but then requires the homeowner to re-pay the deferred payments in a manner similar to a re-payment plan.

FOR FHA HOMEOWNERS
You may qualify for a PARTIAL CLAIM in which your lender can work with you to obtain a one-time payment from the FHA insurance fund to bring your mortgage current.

Homeowners who qualify are:

  • At least four (4) months delinquent, but no more than twelve (12) months delinquent
  • Able to begin making full-payments after they have received a PARTIAL CLAIM.

NOTE: When your lender files a PARTIAL CLAIM, HUD will pay your lender the amount necessary to bring your mortgage loan current. You will be required to sign a Promissory Note and a lien will be placed on your property until the Promissory Note is paid in full.

The Promissory Note is interest free and is due when you pay off your mortgage or sell the property.

FOR HOMEOWNERS WITH VA (VETERAN ADMINISTRATION) GUARANTEED LOANS Contact the Veterans Affairs Department at (205) 731-0550.