According to the U.S. Foreclosure Market Report, 933,045 properties were filed for foreclosure in 2016. The number, while large, actually reflects a 10-year low. Programs from lenders, governmental agencies, and national associations may have had an effect in helping homeowners stave off disastrous foreclosures.
Plans from lowering payments to refinancing mortgages for better rates are there for the taking, and the time for utilizing them is now. One federal program, HARP, designed for homeowners with underwater mortgages, is set to end in September. Here is a rundown on some of the major programs that you can use to lower your monthly payments and avoid foreclosure.
Get Mortgage Help to Prevent Foreclosure
Most of the government assistance programs for homeowners looking at foreclosure are offered by The U.S. Treasury Department and U.S. Department of Housing and Urban Development. There is HUD-approved housing counseling, state/regional mediation, principal reduction alternatives, and emergency lending.
For their part, banks, credit unions, and mortgage lenders offer a range of foreclosure assistance through fee or principal reductions, mortgage refinancing, reverse mortgages, short sales, and loan modification programs.
Working with Lenders
Before it gets down to foreclosure, borrowers should contact their mortgage lender and seek advice. Often, the problem can be remedied through creating a repayment plan - the borrower rolls the delinquent payments into the total of the loan and increases monthly payments until the delinquency is repaid. The lender may even be amenable to a temporary interest rate reduction, to make the payments affordable.
A rate and term refinance is one of the more common ways for consumers to keep their home and pay it off. A strategic time for this kind of refinance is when the fixed amount on an adjustable rate loan is about to reset. Federal Trade Commission data shows that homeowners get the best rates on refinancing by soliciting bids from competing lenders, which can be done by looking for a mortgage refinance at LendingTree.
Mortgage Assistance from Government and National Organizations
The Federal Making Home Affordable program has created refinancing programs in concert with participating lenders to help troubled homeowners, particularly those with underwater mortgages. Here is a look at some of the most popular programs:
Home Affordable Refinance Program®, HARP
Homeowners with Fannie Mae or Freddie Mac mortgages may qualify for HARP loan refinancing to save up to $2,400 a year in payments. Bundled closing costs mean no hefty up-front deposits. The Federal Housing Finance Agency has extended the HARP program to September 2017.
Home Affordable Modification Program (HAMP)
HAMP is a government program that has helped 5 million homeowners receive loan modification assistance to prevent foreclosure. Private lenders, working with HAMP, have reduced median housing payments by $530 each month.
HUD-approved Mortgage Counseling
Foreclosure prevention counseling services are offered for free at state agencies. Call 888-995-HOPE™ (4673). They can explain the ins and outs of Making Home Affordable programs or other options.
Avoiding Foreclosure Scams
According to the Federal Housing Finance Agency, desperate consumers can be prey to scammers who want to capitalize on someone else's misery. Avoid any person or organization that:
- Charges for counseling services
- Promises to avert foreclosure if the consumer hands over their deed
- Wants a down-payment for foreclosure services
For those who have waited too long or been forced into a short sale, life isn't over. Learn how to recover from a foreclosure at LendingTree.