Home Loan Modification Will Help Stop Foreclosure

Home Loan Modification Will Help Stop Foreclosure

Wikipedia defines foreclosure as the legal and professional proceeding in which a mortgagee, or other lienholder, usually a lender, obtains a court ordered termination of a mortgagor’s equitable right of redemption. Usually a lender obtains a security interest from a borrower who mortgages or pledges an asset like a house to secure the loan. If the borrower defaults and the lender tries to repossess the property, courts of equity can grant the borrower the equitable right of redemption if the borrower repays the debt. While this equitable right exists, the lender cannot be sure that it can successfully repossess the property, thus the lender seeks to foreclose the equitable right of redemption. Other lienholders can also foreclose the owner’s right of redemption for other debts, such as for overdue taxes, unpaid contractors’ bills or overdue HOA dues or assessments.

Unfortunately, the current housing crisis has greatly increased the number of foreclosures in many of the bubble states. California, Nevada, Las Vegas and Florida have all seen steady increases in the amount of foreclosures. When an individual or family cannot find a way to make their mortgage payment for several months, foreclosure is almost inevitable. I think we all have friends and family who have been through this troubling time and it is not a pretty sight.

Is there anything you can do to stop foreclosure? There are numerous resources on the internet to help stop foreclosure. Ultimately, the best thing anyone can do is educate themselves on what their options are. I have several close friends who would rather pay off credit card debt than make their mortgage payment. This is a VERY bad idea. If you default on your mortgage payment, it is going to be extremely hard to ever build your credit to a respectable level. If you cannot pay a credit card, your credit score will get hit but not nearly as much as with a foreclosure.

Therefore, your number one financial priority should be to make your mortgage payment each and every month. What if I don’t make enough money to make my mortgage payment? This is all to often the case with the amount of salary reductions and layoffs during the current recession. If you do not make enough money to pay for your mortgage you can look into the Making Home Affordable Plan and see what the government can do to help you out.

Advertisements–> Email Archiving Service | Direct Mail Fort Myers

No matter what you may think, the government wants to keep you in your home. The more homes that are foreclosed on the worse the economy is going to get. That is the exact reason that President Obama created the Making Home Affordable plan. He wants you to stay in your home, make your mortgage payments and live happily ever after. With that being said, you must find a way to budget your money to make your mortgage payments.

The Making Home Affordable Plan mandates that your mortgage is only 31% of your monthly salary. This is the case if your mortgage loan is backed by Fannie Mae or Freddie Mac. Almost 70% of home loans in America are backed by these two companies. If only 31% of your monthly salary is going towards your home loan then you should definitely have enough money to pay for it. One of the hardest things you may have to do is to sit down and write out all the money you actually spend. I mean write down every single penny you spend for a month’s period. If you buy a $1.49 pack of chewing gum before work every Monday, you need to write it down. You do not realize how bad you get nickel and dimed until you actually write down every single purchase.

After you have figured out how much money you spend in a month, you are likely going to need to cut out some habits. Do you really need to buy three drinks every time you go out to eat. For that matter, do you need to go out to eat as much as you do? Is it mandatory that you get your nails done at the most luxurious spa? These are questions you need to ask yourself and be honest. There is a fine line between being happy and being wasteful. If something makes you extremely happy and you can afford it, by all means continue to do it. If you cannot pay for your mortgage, you might want to reconsider some of the things you feel makes you happy.

Another way to get through this troubling time is a home loan modification. This has been extremely important with stopping foreclosures. If you can find a way to get a lower mortgage rate then you are going to pay much less in a monthly mortgage payment. With this, you will also pay much less over the entire lifetime of your home loan. If you can save just $50 a month, that could lead a long way to stopping foreclosure on your home.

Getting a home loan modification is also all about educating yourself on what your options are. There are an unlimited amount of resources available on the internet to research home loan modification or mortgage refinance. Make sure to get information from relevant sites as there are a great deal of spam sites out there. If you need any help, just do a quick google search for mortgage refinance or stop foreclosure and I am sure you will get some great resources.

Ultimately home loan modification will help stop foreclosure. This is exactly what the President wanted and he will make sure it happens. Hopefully the number of foreclosures greatly declines through the next several months as this has been a hinder on the recovery of the economy. Having lower mortgage payments and more money to stimulate the economy will help us on the road to recovery. For more information on home loan modification and stopping foreclosure, make sure to come back to Subprime Blogger for future articles.