Assistance for Homeowners Facing Foreclosure
If you are facing foreclosure, you are by no means alone. Thousands of homeowners in the United States are facing exactly the exact same problem. The good thing is there is help available. Federal, state and nonprofit agencies are set up to supply you with the guidance and financial aid you require. This doesn’t mean every foreclosure can be avoided, but you might have the ability to avoid yours. Act quickly. Even in the event that you can not save your house, there are alternatives that may protect you from some of the unwanted financial, legal and tax implications of a foreclosure.
Knowing what mortgage aid programs are available for you, how to apply for them, how to negotiate conditions with your lender and the consequences of foreclosure avoidance methods may mean the difference between losing your house and saving it. According to a report from the Mortgage Bankers Association, nearly 60 percent of foreclosures in North Carolina occur to borrowers who have good credit–many of whom would probably have qualified for mortgage assistance plans. Assuming different nations have similar statistics, mortgage education can go a long way in avoiding foreclosures. The Department of Housing and Urban Development (HUD) certainly feels this way. HUD subsidizes housing counseling agencies across the United States so fighting debtors may get free (or cheap ) professional guidance.
The Big Plan
The leading supplier of assistance to homeowners facing foreclosure is the Department of Treasury’s Earning Home Affordable Plan. This program comprises four programs: the Home Affordable Modification Program, the Home Affordable Refinance Program, the Second Lien Modification Program and the Home Affordable Foreclosure Alternatives. Find out what program can assist you by greatest by calling (888) 995-HOPE or seeing the Plan’s official site (see Resources).
Foreclosures are complex legal procedures. Expert legal advice can make the difference when dealing with a lender. There are scores of legal aid bureaus that provide low-cost or free legal aid to homeowners facing foreclosure. In California, for example, the Department of Consumer Affairs provides an up-to-date collection of legal aid agencies by state. The County of San Francisco alone has three legal aid institutions willing to assist low-income debtors (see Resources).
Foreclosure Tax Relief
Taxation might be the very last thing in the mind of borrowers facing foreclosure. Regrettably it ought to be in the forefront. The IRS believes debt decrease by a lender as taxable income. In regards to debtors whose foreclosure or foreclosure alternative (mainly short sales and deeds-in-lieu of foreclosure) sale price doesn’t include the outstanding balance on the mortgage. That clarifies most foreclosures. Luckily the Mortgage Forgiveness Debt Relief Act of 2007 allows debtors to exclude such an”income” when the property is their main residence.
Misconceptions and urban myths may lead to homeowners facing foreclosure to make bad decisions or ignore opportunities for locating help. For example, many borrowers believe that their lender wants to foreclose on them. In fact, lenders attempt to avoid foreclosures because they’re costly and time-consuming. They foreclose only as a last resort when delinquent borrowers cannot afford their mortgages. Another common mistake is to underestimate the seriousness of delinquency. In some nations, for example California, the time from one missed payment to foreclosure is typically just four months. Borrowers should start looking for help till they overlook one payment, when help is easier to supply and more options are available.