While the housing market has rebounded and the real estate market prices continue to rise, many people in Los Angeles (and throughout the country) continue to struggle to make their mortgage payments, even now as the pandemic slowly dissipates.
If you’re underwater on your home, or having trouble keeping up with your monthly mortgage payments, you could be fearful that your mortgage provider is going to foreclose.
Thankfully, there are a number of things you can do to avoid foreclosure in Los Angeles and throughout the country. It’s important to remember that moving quickly is absolutely paramount, and could save your credit rating and your home.
How To Avoid Foreclosure – Don’t Abandon Ship
This can be stressful situation, but it’s extremely important to keep your wits about you. A foreclosure will have a huge negative impact on your credit score, and likely prevent you from purchasing a home for years to come. If you sell your home, you could still leave a portion of the loan unpaid, and the lender could pursue legal action against your for the unpaid portion.
While it’s extremely stressful, you do have options:
- Negotiate with your mortgage lender.
Banks and other financial institutions are well aware that citizens of Los Angeles are struggling. If you haven’t missed a payment yet, you may have some leverage to renegotiate the terms of your loan. Banks don’t like foreclosing on homes, and many will work with you if you aren’t too far behind. You may be offered forbearance, or even a full loan modification.
- Ask for help from Uncle Sam. Over the last 10 years, the federal government has implemented a number of programs to help struggling homeowners. The Federal Housing Finance Agency (FHFA) ended its Home Affordable Refinance Program (HARP) on December 31, 2018. HARP was launched in 2009 as a way for homeowners who were current on their existing mortgage loans but had little or no equity, to take advantage of low mortgage rates. After HARP expired, many homeowners still had too little equity to refi. So Fannie Mae and Freddie Mac came up with new programs to help ‘underwater’ borrowers. These HARP replacement programs are still helping borrowers with high LTVs refinance at today’s low rates.
- Consider the Legal Recommendations. The Federal Trade Commission (FTC) which is a national consumer protection agency advises that if you are having trouble meeting your mortgage payments, you should contact your loan servicer as soon as possible. Speak clearly about the installments and payment amounts with the company that handles your mortgage loan account, listen to their recommendations and evaluate your options. Keep in mind that the longer it takes you to contact your bank, the fewer options you will have.
- Alternatives to Foreclosure. Some lenders may be willing to help you avoid foreclosure, but keep in mind that these alternatives are not always easy to achieve. You don’t have to lose your home today, know now what are the options to keep your home. There are programs available to help you avoid foreclosure on your home or property, and you may even work with your lender to find alternatives to avoid foreclosure.
Our Tips to Avoid Foreclosure
Keep an eye on your mortgage loan account, check it regularly to check that your payments are credited on time. Make sure that no unexpected or unusual costs or charges are charged to your account.
In case you do not receive monthly account statements, go to your administrator and ask if you can access your loan account online. Remember to always be attentive and question everything that seems strange, out of place, or you do not understand. We recommend that you keep records of all communications with your mortgage servicer and payments.
- Get Help From a Trusted Ally. There are companies that have experienced housing counselors who can help you avoid foreclosure. They will help you understand the complicated steps of the process, show you what your options are, and advise you during the request for help from your mortgage servicer.
- Know Your Rights. A mortgage servicer cannot make a first notice or filing of foreclosure until more than 120 days are late in payments. If you submit a completed mortgage assistance application on time, the servicer will not be able to initiate a foreclosure, at least not while you are still being evaluated for a loan modification, or if you are already following the requirements of a loan modification. The sooner you complete your mortgage assistance application, the more likely you are to avoid foreclosure.
- Protect Your Yourself Against Foreclosure Fraud. Scammers try to take advantage of homeowners in trouble by charging them a lot of money. While it is true that there are reliable companies that provide advice to avoid foreclosure, there are also some scammers who take advantage of the urgency and vulnerability of homeowners to take advantage. Be on the lookout for possible signs of fraud. We recommend that you turn on the alarms if they ask you to pay something in advance for the help they are going to give you, they guarantee that the company will change the terms of your mortgage or that you will not lose your home. The obvious signs of fraud are those in which the company will ask you to transfer your home or to sign documents with which you do not agree or do not understand. Never listen to companies that tell you to send your payment to someone who does not belong to your mortgage company or who is not the mortgage servicer, and never stop paying your mortgage.
Foreclosure can have a lasting effect on your financial life, and it’s important to move quickly and take advantage of any options available. You could save both your credit rating and remain in your home.
We may be able to help you avoid foreclosure, connect with us to discuss your situation. We do not charge fees and can evaluate your situation quickly, then present you your options so you can move forward and get this foreclosure behind you.