FHA Secure: Is It Really Secure?
And in the news of mortgages and foreclosure is the world of the government. On April 9th, it was announced that there would be a new HUD assistance program offered. For HUD homes, those who need extra assistance in order to prevent foreclosure, would have the ability to re-finance and work with HUD in order to secure their homes. The act is being called FHA Secure, meaning Federal Housing Administration Secure.
The idea is to provide assistance to those who may loose their homes and need extra help in paying the bills and getting caught up. It is providing help to give more mortgages to those who can not afford housing. It is also offering security for those who have some late payments or received mortgage principal from the lender that started their mortgage.
The “plan” is to help those who need extra assistance in mortgages so that they can get out of the situation they are in and so they can keep their homes. This is supposed to give the lenders flexibility of loans through an extra $68 billion.
While this may temporarily fix the problem of mortgages, foreclosures and everyone in America who doesn’t have enough money to live (basically everyone), it doesn’t get to the root of the problem. If you look closely, you will notice that the money is being given to provide – not assistance – but extra mortgages. This allows those who are already in debt to add in more debt on top of this, so that they can “get caught up.” Eventually, the money that can’t be paid back has to be paid back.
The late payments and principal, while it may seem to be a quick fix, only offers re-finance options. It doesn’t necessarily change the situation or the problem that the individuals got into in the first place.
With the power and control that the government and HUD has over homes that are about to foreclose, as well as our entire living situation in America, is also what leaves me pondering – are we ever really going to be safe and secure with the system we are set up with? Or, are we just all bound to loose money and living possibilities through high interest rates and banks that are ready to take it all under a disguise of having a new “security blanket.”
Foreclosure Help
For those facing the possibility of foreclosure on their home, there options. From the various programs that your mortgage company may have to the possibility of filing Chapter 13 Bankruptcy there is help out there. The biggest hurdle is getting over the depression that can accompany the financial catastrophe that has caused the foreclosure proceeding in the first place. When facing the prospect of foreclosure, the range of emotions can be hard to deal with. Your state of mind may possibly be hopeless and you think that there is nothing that you can do. This is not true. Although I can understand your feelings, as I have been there recently, you are able to overcome it.
You must first accept what problems arose that made it hard or impossible to afford the monthly payments. If you faced a hardship such as an illness or job loss, is the problem over? If you can answer yes to this, you are already on your way to solving your foreclosure problems. Even getting a month or two behind on your mortgage can create bigger problems. Often times, you are unable to pay the past due amount, but your mortgage company will not accept any payment until it is paid in full. This is the situation I found myself in. The first rule is you must stay in contact with your loan company. When they call, even if you can not make arrangements to pay at that time, still answer the phone and speak with them. They do have programs available to help you. You do need to contact them to try and work these out. They will not offer you any payment plans unless you ask.
Mortgage companies, especially now, do not want to foreclosure on your home. In most cases, they will not be able to get what the home is worth, and certainly not what you owe for it. This causes them to take a loss not only in the property, but in legal fees and court costs. Keeping the lines of communication open will help to resolve your problem much more quickly.
Some types of debt relief assistance your mortgage company can offer through their loss mitigation department are a forbearance agreement, payment plans, a loan modification, deed in lu of foreclosure and a short sale. Not all of these options may be available to you, or work for your situation. We will talk about a forbearance agreement first.
A forbearance agreement is an agreement made by you with your mortgage company to make up your past due payments in a few months, along with your current payment. Before you enter an agreement like this, be sure you are going to be able to make not only you monthly payment, but the additional payment they will be requesting. For example, if you have a $1000 a month mortgage, you may find that your payment has increased to $1500 for a few months. This will not stop the foreclosure proceedings though. You will still be considered in foreclosure until the entire past due amount is paid. Once you have accomplished this, the proceedings will stop. If at any time you are late on the payment, the agreement can be revoked. With this type of plan, there is not a grace period. If they have set a due date as the first of the month, you must have the payment there by that date.
A forbearance agreement is not always a good option for some. If you are not able to afford that additional amount, but can resume your monthly payments, you may have the option of a loan modification. This will enable you to add your past due amount to the end of your loan. This will lengthen your loan term, and possibly raise your monthly payment by a few dollars, but id a much better option if you are not able to afford a large payment. This loan modification is in an essence, rewriting your loan to start out with the total of your current loan amount. This is an excellent option to not only stop the foreclosure, but also if you are still struggling to make the regular payment.
There are other repayment options that your mortgage company may offer. You will want to explore what programs they have available, and be sure to apply for all of them. Each of these do require that you meet certain guidelines, especially that the hardship that caused you to become past due is resolved. Be honest with your lender. If you no longer make the amount of money that you once did, they can work with you. You must provide them all the information though so that they can offer a program that will fit into your budget. The important thing to remember is that before you enter into a payment agreement be sure you are going to be able to afford the payment that is being set up. If you are not able to, it will not help in any way to enter into the agreement.
If you are still facing a hardship, and are not going to be able to resume your monthly payments, you may look into options to give the property up. There are ways to do this without hurting your credit rating the way that a foreclosure and Sheriff Sale will. First, let’s examine a short sale. Your mortgage company has a network of investors that may be interested in your property. This is an option if the sale is looming ahead and you are not able to afford the property. Be advised though that your property may not sell for it’s worth and you may still be liable for a portion of your loan.
Another option is a deed in lu of foreclosure. This means that you turn the deed to the property over to the mortgage company. Often times they will accept your deed, rather than have the property go through a Sheriff sale. This gives them the opportunity to sell the property, without having to accept the low bids that can come from a sheriff sale. This again, is better for your overall credit rating. Please keep in mind though that your rating will be lower because of your late payments.
I hope that this has been able to give you some tools to get you out of the situation that you are in. It is very devastating to be facing a foreclosure and there are alternative out there. You must do the research and follow through with any plan you begin. As a last resort, if you have exhausted all your options, Chapter 13 Bankruptcy may be a possibility to keep your home. This only is possible if you are able to make your monthly payments again. There are fees associated with Bankruptcy, and vary from state to state as well as the acceptable assets that may be kept.
I wish you luck and success with your future home buying journey, and hope that with this advice and the determination you will continue to be a home owner.