Mortgage Modification vs. Refinancing: Which Should You Choose?

If you’re one of the millions of troubled homeowners suffering from increased taxes, insurance and mortgage payments due to an adjustable rate mortgage and falling home values, there are options for foreclosure assistance and attempting to come current on your loan. Two of the best options include either a mortgage modification or refinancing your mortgage.

Mortgage Modification

Mortgage modification consists of your current lender altering the terms originally agreed to when you first took out the loan. Interest rates may be cut, principal amounts may be reduced, the life of the loan could be extended to lower monthly payments, penalties and fees may be forgiven, and escrow accounts could be altered or eliminated.

The biggest advantage to using mortgage modification to avoid foreclosure and come current on your loan is that it is much less expensive than refinancing because it avoids origination fees associated with a new loan. It also allows you to stay with your current mortgage lender, versus searching for a new one that will refinance for you. In addition, refinancing must generally take place prior to defaulting on a loan, so mortgage modification may still be an option after this happens in the foreclosure process.

Many troubled homeowners may have heard of filing for a forbearance agreement as well. However, these agreements are designed to only last for a short amount of time, giving the owner a chance to regain his footing and find a new source of income. Conversely, mortgage modification is a permanent solution in the case that an owner will never be able to repay the loan, such as if they have become disabled.

Refinancing

Refinancing is also an option which will bring your loan current, and may be issued at a lower rate, resulting in a lower monthly payment. This is also a permanent option for troubled homeowners, but it should be remembered that it must be completed before foreclosure notices are filed on the property.

Going to a new lender and applying for a new mortgage requires you to have some sort of income or other way to pay the loan, as well as good credit ratings. If you have already fallen behind on your mortgage and it is reflected on your report, why would another lender give you money for the same purpose?

This option is best utilized as soon as a changing circumstance happens that will change your income or ability to pay. One spouse leaving work to stay home with a new baby, injury, illness and losing a job may all be reasons to refinance for a lower payment.

The key to preventing seeing your home in foreclosure is to communicate your situation and learn to negotiate with your lender. Without knowing your situation ahead of time, they may just assume you’re refusing to pay for no good reason. Call them and let them know when you do about changing circumstances that may affect your ability to pay.

Avoiding foreclosure means you can’t avoid your lender; it will only make things worse in the long run, and perhaps become too late to do anything about losing your home.

Foreclosure Processes and Remedies

Help with Foreclosure – Keep Your Home!

Worrying about where your next mortgage payment is coming from can be extremely stressful and affect the entire family. Stress can negatively impact your health and everyday activities, and is easily experienced in today’s market with lowered home values and increasing rates and mortgage payments.

If you find yourself facing foreclosure proceedings and the possibility of losing your home, it’s important to remain informed about all recent legislation and local laws that affect your situation. Knowledge is the first line of defense, and is important when it comes to understanding the foreclosure process and how to prevent it. Following is some general information to start along the path of becoming informed and learning how to keep your home:

The Process of Foreclosure: What to Expect

State and local laws govern much of what happens during a bank foreclosure, and it will behoove you to become familiar with these. Start by visiting your local government’s website or office and search for applicable laws which regulate the foreclosure process and outline your rights as a citizen.

Your original loan documents will also include language that legally outlines what actions must be taken by a lender before filing for a house foreclosure, and what options you may have. Read these very carefully and ensure you understand them and that your lender is following the guidelines in their collection efforts. If not, you may have legal claim to get them to stop all foreclosure proceedings against you.

Typically, when you first start falling behind on mortgage payments, your lender will start sending default letters asking for immediate payment on the account. This may go on for several months, increasing the amount you actually owe to come current on the loan. This is why waiting is never a good thing – you can easily find yourself in the midst of pre-foreclosure, or significantly behind on payments if you don’t talk to your lender as soon as you get behind.

Your state will most likely require a court to supervise any foreclosure, also called a ‘judicial foreclosure.’ The lender will request a hearing, which becomes very time-consuming and expensive – this is why they will typically try to avoid this step and just collect directly from you.

Of course, you may also live in a state that allows ‘non-judicial foreclosure.’ If this is the case, your lender may foreclose and take possession without ever setting foot inside a courtroom. Your loan documents may include a clause called ‘power of sale,’ which essentially means that they may exercise a non-judicial foreclosure.

Every foreclosure is different when it comes to the amount of time it takes to become complete. It may take only a few months or as long as a few years – after the bank takes possession of the property, it could be auctioned off or listed on the local market of foreclosures for sale.

Preventing Foreclosure

Discovering a remedy for foreclosure is much more difficult than preventing it in the first place. The best way to prevent home foreclosure is to communicate your situation with your lender immediately when there is a problem. The entire process is very costly to them, and they will be more likely to negotiate terms of your contract as long as you maintain contact and give them information about your current financial status.

Forbearance Agreements Can Stop Real Estate Foreclosure

Losing a job or suffering from a major illness or injury can greatly reduce your ability to stay current on your mortgage and cause significant financial strain. Foreclosure proceedings can be imminent, but you do have options to avoid or stop them in their tracks. Contacting your lender and negotiating a forbearance agreement can help to alleviate the burden of a high mortgage payment temporarily, either by delaying the payments completely or significantly reducing them to a more comfortable level.

Eventually, you will have to make the full payments again, but this temporary agreement can help you through the financially tough times until you get back on your feet and resolve your current status. Occasionally, as an act of good faith, your lender will require a down payment upfront to enter into this type of agreement.

Sometimes, the most difficult part of reaching an agreement is finding the correct person or department to communicate your needs to. They must not only be able to mutually determine the terms, but also authorize the plan to make it official. If you simply call the main branch, they may give you the runaround. Collection departments are most likely going to be able to refer you to the correct party, but you’ll have to be persistent; their job is simply to obtain any type of payment from you, so make sure you’re making a payment on a forbearance.

You can always ask for a manager to negotiate the agreement and communicate your current position. Once you find the correct person and agree to terms, ensure they mail you a copy of it in writing with a signature and date. Also remember to record every person and extension you speak to, and outline the subject and discussion you had with that person – you may need this information later.

The key to preventing a bank foreclosure is to initiate a discussion with your lender as soon as you know there will be an issue holding up your end of the bargain. Even if you haven’t missed a payment yet, but just lost your job today, it’s a good idea to contact them and advise them of the situation. As time goes on and the situation worsens, your options will become very limited when it comes to mortgage foreclosure and resolving it.

An important thing for you to remember is that you really have the ball in your court. Foreclosure proceedings are a legal mess, and will cost your lender significant legal fees and lost time, so they prefer to avoid it at all cost. If you maintain communication with them and fulfill your part of any agreement reached, they will most likely work with you until your situation changes or improves.

That being said, your lender is also in the business of making money, and a forbearance agreement can significantly reduce their profits. Maintain your patience and a calm state of mind, and be prepared to go back and forth several times before an agreement is reached. It’s also a good idea to retain an attorney or become familiar with state and local laws so that you remain informed about your rights and what your lender can and cannot do.

Avoid Foreclosure with a Short Sale

Sometimes, tough circumstances require tough choices. Getting behind on mortgage payments and facing home foreclosure is never a good situation, and you may feel as if you’ve tried everything in your power to remedy the situation to no avail. Even if your lender altered terms or agreed to lowered or delayed payments, this can’t go on forever. If your situation has not improved and you’re left with no other option, a short sale may be the best solution for you.

As a pre-foreclosure property, a down market may have contributed to lowered home values, and you may discover you owe much more on your home than it is currently worth. You do have the option to find a buyer out there, but you first need to get your lender to agree to a lower price than what would be required to pay off the loan in full.

Rather than face bankruptcy or a mortgage foreclosure that can tarnish your good name for several years, finding an interested party that wants to purchase your home is a great option. This means, of course, that you will still lose your home – but will still have a chance to gather your means and start over again.

Your lender will most likely prefer to negotiate a short sale to avoid the foreclosure process, as well. It is extremely time consuming and costly, and it is in their best interest to get out of a bad situation as quickly as possible.

Specific mortgage lenders may adopt their own rules when it comes to short sales and accepting them, but there are some general actions you can take to start along this path.

Start by contacting them by phone. You may have to be quite aggressive to get to the authorized person to speak to you about a short sale, but they won’t be able to hide from you for long. You need to insist on speaking with the party who will actually be in charge of making the short sale approval decision.

Next, you’ll need to write a Letter of Authorization, or LOA, in order to continue the short sale process. This letter acts to give the lender permission to speak to third parties regarding your home loan. Ensure this LOA includes your name, address and contact information, the date it was written, the address of the property subject to the short sale, the loan number and lender’s information, and your real estate agent’s information that will be handling the sale.

You will also need to draft the following and give copies to your lender:

• Preliminary Net Sheet: This outlines your expected closing price, minus any agent commissions and other closing costs to give the lender an idea of what amount they can expect to recoup.

• Hardship Letter: This should include the reasons you have been unable and will be unable to maintain the current mortgage, whether it is due to a lost job or illness.

• Proof of Income: This may be your unemployment insurance information if you have recently lost your job.

• Bank Statements

• Comparable Sales Information: Any real estate agent can provide this information.

• Purchase Agreement Upon Receiving An Offer

Cutting Costs to Avoid Home Foreclosure

Everyone comes upon hard times at some point in their life, but facing real estate foreclosure can seem especially stressful. No matter what event brought you to this state, it’s important to take hold of the situation immediately and rein in your spending so you can attempt to stay current on your most important investment: your home.

Of course, you should reassess your family’s budget and spending habits way before you are ever late on a bill; many are quite surprised to learn that even in the midst of foreclosure proceedings, they are able to come up with the funds to avoid losing their home. Start by gathering all of your bills and bank records, and determine what your starting balance of usable funds is. Prioritize your expenses and bills from most essential to least essential, with your mortgage being at the top.

Desperate times call for desperate measures, so don’t expect this process to be easy. This could become the most important thing you do for your family in the long run, although it will be painful for a short while.

Tally up your grocery bills, mortgage and insurance premiums that are paid on a monthly basis. Now look at how much you spend on any type of food or drink away from home – you’d be surprised how quickly the $1 hamburgers that provide a quick and easy lunch add up! These expenses can be immediately stopped, adding to your funds available to pay your mortgage.

Now look at things like dance lessons for the kids, entertainment costs, unsecured loan and credit card payments, gifts for others, clothing, Internet, cable and satellite bills. All of these things can be eliminated, at least for a short time to catch up on the important bills. You can also significantly lower your utilities by turning off the air conditioner and opening the windows instead for a few weeks.

If you have an emergency savings account or even a retirement account with sufficient funds to bring your mortgage out of foreclosure, now is the time to use it. Yes, this is an emergency situation that requires you to pull out all the stops. Do what is necessary to save your home from foreclosure first, then work on paring down your monthly outlay to stay up to date.

Look at your mortgage account carefully. Do you have an escrow account that is making your payment unaffordable? If so, cancel it and the lender will send you a check for the balance of this account. This will require you to pay your own taxes and insurance in the future, but will give you a little extra capital to work with today.

Another option is to simply ask your lender if they can suspend your escrow account for a specified period of time. This is ideal if you fear you won’t be able to afford the taxes and insurance when they come due, but also don’t want to pay for them ahead of time.

Finally, ensure you maintaining an open line of communication with your lender so they know the efforts and changes you are making to fulfill your obligations with them.

Help with Foreclosure – Keep Your Home!

The Reasons Why Using A Non Profit Debt Consolidation Program Is Profitable

The definition of a non profit debt consolidation program is a service which will provide you with the option to reign in all of your debts and pay one monthly payment. The debt consolidation service will require a fee which will be added on to the monthly payments. However, the company does not make a profit, the initial fee simply goes towards administration costs.

The emphasis is on helping the customer to achieve one monthly payment that they can afford. The debt consolidation agency will communicate with the creditors on the customer’s behalf and arrange for interest rates to be lowered where possible and any outstanding over-limit fees to be removed from the account thus reducing the overall debt.

We live in a world run by credit so it is not surprising that half of the country if not more is in debt. Once you are on the slippery slope of debt it is very easy to become unable to claw your way out as the interest rates alone will take most of your money before you can even begin to pay back what you actually borrowed.

The first step to financial freedom is to take stock of your situation and approach a non profit debt consolidation agency. These agencies have a well established relationship with many of the creditors and can come to an arrangement to reduce payments for the borrower. One monthly payment is made which the consolidation agency uses to pay the creditors.

There are, unfortunately, some unethical agencies who will take advantage of those heavily in debt. Always be careful when choosing a non profit debt consolidation agency and do a little research into their past history.
Once you have chosen a high quality agency, you can arrange a suitable monthly payment that is realistic and affordable.

Taking this step is crucial for future credit ratings. This will include the ability to take out a mortgage and pay for your children’s education. Whatever stage you are in your life it is always beneficial to have a clear credit rating as we never know when we might need to borrow.

The non profit consolidation agency will also provide appropriate guidance and advice to help those with previous struggles to budget and keep financial matters in order for the future. There is no point getting yourself out of debt only to get right back in again.

No matter how you found yourself in a financial bind, maybe you lost your job and couldn’t find another, maybe the cost of living was simply more than your income would allow. Whatever your reason for getting into your debt situation, there is a way out. The non profit debt consolidation agency will work with you, helping you find ways to manage your money for the time being and the future.

If the rising debts are not faced head on, the interest and fees will see to it that it is a never ending battle. These debt consolidation agencies are there to reverse the vicious cycle and allow you to jump free of the sinking ship.

Find a legitimate agency that will help you regain your financial standing and start your journey to a debt free life.

If you have a large credit card debt, you may need to consolidate your credit cards debt. Bill consolidation loans and debt consolidation solutions are there to help you consolidate your debt and have a better payment structure, which can help you to eventually get out of debt.

When Is A Good Time To Approach A Debt Consolidation Services Non Profit Company?

Credit Card Debt	$ Select One01 – 2,4992,500 – 4,9995,000 – 7,4997,500 – 9,99910,000 – 12,49912,500 – 14,99915,000 – 19,99920,000 – 29,99930,000 – 39,99940,000 – 49,99950000+
Other Unsecured Debt	$ Select One01 – 2,4992,500 – 4,9995,000 – 7,4997,500 – 9,99910,000 – 12,49912,500 – 14,99915,000 – 19,99920,000 – 29,99930,000 – 39,99940,000 – 49,99950000+
Number of Creditors	Select One234+
Status of Bill Payments	Select OneUp to DateAbout to Fall Behind1 Month Behind2 or More Months Behind
I want to	Select OneEliminate My DebtConsolidate My DebtSeek Advice
Own a Home?	Yes  No

When credit is readily on offer it is very difficult not to accept it when times as tough. Many credit card companies will give credit even to those with a dark history of bad debts and those who earn very little. The main concern is that they will be paid back and then some, making the offer a very profitable one.

However, for those left with huge monthly payments and astronomical interest rates, payments can become unaffordable and any little extra cash available from every day costs are eaten up by the interest and not even touching the overall balance.

What happens then? Well, then is a good time to approach a debt consolidation agency and preferably a Debt Consolidation Services Non Profit Company for help to gather all the debts in one place, creating one affordable monthly payment. Why? Because this type of agency will not profit from your struggles and include large fees for the service.

Following are a list of reasons why a non profit debt consolidation service can be an extremely advisable, practical and relatively simple method to help pay off your debt

1. Your one monthly payment is calculated on what you can realistically afford with the debt consolidation agency distributing the payment on your behalf to the creditors.

2. The debt consolidation agency credit counsellors will use their professional relationship with the creditors to reduce your interest rates and where possible eliminating previous over-limit and late payment fees.

3. There will be a consolidation fee that you must pay, you will be notified of this prior to setting up payments with the option to go ahead or not. However, this fee will more than pay for itself due to your debts being significantly reduced.

4. You can live comfortably and stress free in the knowledge that your debts are taken care of with payments you can actually afford.

5. The endless phone calls and demands for payment will stop, allowing you to stop worrying about what action will be taken.

6. You can start to plan a future that is not tainted with debt.

The afore-mentioned fee that you will have to pay to the debt consolidation services non profit agency will cover the administration costs for liaising with the creditors to reduce your debts.

Before deciding on a non profit debt consolidation service, do a little background check to make sure that they have a good history of professional, high quality service. Some companies have a more fully comprehensive service offering advice for customers on how to live debt free and personal budgeting advice. Find a company that will work to help get you out of debt and keep you there.

What is Nonprofit Debt Consolidation And Where Can I find It?

We will be looking into what non profit debt consolidation actually is and why it is so beneficial for those with many debts they are unable to repay. You will be provided with a company in particular to give you an idea of what is available should you require the service.

Those who find themselves drowning in debt will find that most of their monthly payments are going towards the interest without the actual balance reducing. This uneconomical method of dealing with repayments cannot continue and further help must be sought. This help will be in the form of a nonprofit debt consolidation agency.

The most notable benefit of a non profit debt consolidation program is as the name suggests, there is no profit made by the company. Conversely, a profit debt consolidation agency will make a profit and in turn will probably charge a heavier fee.

Unfortunately, there are some scan agencies who take advantage of those plagued with debt by offering financial “help” but puts them deeper into debt than there were initially. This can occur in both profit and non profit debt consolidation agencies, so it is vital that you check the authenticity of an agency and it’s past history.

The process used by a debt consolidation program will involve obtaining you personal financial details, this means the company in question must be fully legitimate and have a known history of providing both ethical and professional help. It is possible to do a bit of ground work to find out if there have been any criticism for a particular agency by enquiring at a Better Business Bureau.

Once you are happy that you have found a reputable agency you can begin the process of nonprofit debt consolidation. Firstly the agency will have a look at your finances, what is coming in and going out. They will then liaise with your creditors and agree upon a more suitable and affordable monthly payment over a longer period. Interest rates will be reduced and many times, over limit and other fees that have been applied to your account will be withdrawn.

The debt consolidation service will use their relationship with the creditors to provide you with the lowest rate and monthly payment possible. A sum which will encompass all your debts will finally be agreed upon by you and the debt consolidation service that they will use to pay your creditors. You will be able to continue paying your debts and live comfortably with piece of mind.

If you have no idea where to start your research into suitable agencies, a very reputable company that provide non profit consolidation is Credit Counselling Services. This company have a well established and immaculate reputation and have helped many to lift themselves out of their financial struggle

Agencies such as this can not only provide you with a service for consolidating your debts but also as a port of call for any questions or concerns that you have such as personal budgeting, on an on-going basis. They will provide you with appropriate advice taking care of your financial issues and allowing you to begin living stress free.

Probably the most important message here, is that you must take care to find a valid debt consolidation agency such as the Credit Counselling Services to make sure you are in safe hands. From there you will be taken care of and guided appropriately.

Looking For Non-Profit Debt Consolidation In Florida?

Like many other areas, Florida has an ever increasing population dealing with credit debt. Many are finding themselves in deep water with monthly payments that they just cannot afford.

If you are looking for non profit, debt consolidation in Florida, a good place to start is CuraDebt. This organization will assist you with your financial problems and put an end to your vicious credit debt cycle.

Why is CuraDebt so beneficial? Like many other debt consolidation programs, the emphasis is on reducing your monthly instalments to realistic achievable amounts and lowering the interest which makes them otherwise so unaffordable. The never ending phone calls from creditors will cease, giving you piece of mind that your finances are in order.

No more payments here and there, just one affordable payment to the debt consolidation lenders, who will then make payments to the various creditors on your behalf. Fees that have been incurred due to late payments and going over your limit will be waived or at the very least significantly reduced.

Debt consolidation is a relatively new concept where all your debts are assigned to one organization who deals with your creditors for you and combines your debts into one easy payment per month.

Sometimes the headache of keeping track with all the various debts can hugely contribute to the stress involved in financial difficulties.

Free debt consolidation helps you to get back on track without the middle man making a profit from your debt situation and there are thousands of people currently taking advantage of this assistance to clear debts much faster than they would otherwise be able to.

Those looking for a debt consolidation program in Florida, including credit card debt consolidation and other loan debt can quickly and safely, using the debt consolidation program, regain control of their finances and begin the road to living debt free.

These debt consolidation lenders have a working relationship with many of the credit companies and can provide you with the lowest interest rate and remove added fees, the interest will also be further reduced with the debt itself being reduced.

You will be assisted every step of the way from debt consolidation advice to dealing with the creditors on your behalf.

Research has shown that the average amount of credits cards per household in the U.S is fourteen credit cards. With many credit card companies offering enticing credit with additional bonuses it is no wonder that credit card debt is rife. However with help from free debt consolidation it is now possible to reverse the nightmare of debt and the sky high interest rates that go with it.