Help with Mortgages in Trouble

Can a Refinance Help?
 
Overview

Learn the Options for Solving Your Mortgage Problems

Nobody wants to lose their home. If you are falling behind on your mortgage payments, you may feel that you are running out of options. You need to understand that the steps you take will make a difference in what happens.

Learn about the pros and cons of the different choices you have. The different articles in our ‘Mortgages in Trouble’ section of our Web site help you understand your choices and how they will affect you.

One basic rule is that any time that you aren’t able to make your required mortgage payment, you should contact your lender. It may not be pleasant to call them, but maintaining good communication with your lender is important. You can gain flexibility that would not be available to you were you to avoid speaking with your lender. Keep detailed and accurate records of all conversations and correspondence.

Make sure that you understand the options that will allow you to stay in your home. You may benefit from working out a home loan modification, but that is not the only way to solve the problem.

Sometimes, there is no better option than selling your home to avoid a foreclosure. There are different ways you can sell your home. Each has a different impact on your credit rating. In some cases you are responsible for any unpaid debt to your lender. Other times, you have no responsibility. It is crucial for you to research your options, so you find the best solution.

Sometimes, foreclosure is inevitable. Bills.com will help you understand what foreclosure is, how the foreclosure process works, and what the results of a foreclosure can be. You could end up stuck with a mortgage deficiency balance or not, depending on the state you live in and the type of mortgage you have.

Underwater Refinance Programs

New programs have been created to help underwater homeowners. It is your responsibility to learn about them. We’re here to help, whether it is keeping you up-to-date on the expanded HARP mortgage program or the changes made to the FHA Streamline and VA Streamline Refinance programs.

Use the information and resources at Bills.com to increase your knowledge. Review the questions that other readers have asked or Ask Bill any question you have about mortgage problems or foreclosure issues.

  • Judicial Foreclosure and Other Types

    Foreclosure is a complicated and intimidating process, so make sure to do your homework to understand your rights.

  • Allowing a Home to go into Foreclosure

    In a foreclosure, what happens if the house is worth less than what I owe to the mortgage company?

  • Judicial Foreclosure and Other Types

    Foreclosure is a complicated and intimidating process, so make sure to do your homework to understand your rights.

  • Stop Foreclosure

    There are a variety of options to stop foreclosure, so educate yourself to find the best possible outcome.

  • HAMP Program

    Learn more about the HAMP program's successes and criticisms.

  • Foreclosure Articles

    See the Bills.com Foreclosure Resource Center to learn your options and rights.

  • FHA Foreclosure Assistance

    FHA and HUD have resources available to help you avoid foreclosure.

  • Subprime Mortgage

    What is a Subprime Mortgage?

  • Deed In Lieu Of Foreclosure vs. Short Sale

    What are the pros and cons of accepting a deed in lieu of foreclosure in comparison to a short sale?

  • Voluntary Repossession

    What is the difference between a voluntary repossession and one where the vehicle is snatched by a repo man?

  • National City Mortgage

    National City Mortgage is one of the nation\'s largest financial holding companies. They offer a full line of mortgage products, including refinance, purchase loans, debt consolidation and all mortgage products.

  • 401K Hardship Withdrawal

    Are there any specific reasons one has to have for 401(k) withdrawal without penalty?

  • Freedom Debt Relief Information

    Is Freedom Debt Relief a good option for debt relief? Can you do a review of Freedom Debt Relief for me for my debt troubles?

  • Hardship based loans

    Need to apply for a personal loan due to financial hardship? Bills has advice on hardship loans to help you solve your money headaches.

  • 401K Cash Out Penalties

    I cashed out my 401(k) and they took 60% and told me the rest had to go back to the employer. This doesn't sound right to me.

  • Buy a Home with an FHA loan

    Learn How An FHA-Insured Loan Can Benefit You, When You Are Looking to Buy a Home.

  • Bank of America Refinance

    Should I refinance my home with Bank of America?

  • Debt Consolidation Options

    Debt Consolidation and How to Consolidate Debt - Tips and Advice to Help You Make a Wise Decision.

  • Refinance My Home

    "Help Me Refinance My Home" -- What you need to know.

  • US Bank No Closing Cost Refinance

    Can I get a no closing cost refinance with US Bank if I'm a customer?

  • Debt Relief

    Debt Relief Options | Learn about and compare all debt relief options, including: Debt Consolidation, Credit Counseling, Debt Settlement and Debt Relief Consolidation Loans - Compare All of Your Debt Relief Options for free at Bills.com.

  • Fifth Third Bank Mortgage

    At Fifth Third, we work hard to be a successful, principled, involved financial institution that serves its customers and community. Since its beginning, Fifth Third has provided superior customer service and followed sound banking principles.

  • Washington Mutual

    Washington Mutual offers mortgage loans across the western United States. See how they are rated by Bills.com and by their own users.

  • Government Debt Relief

    What you need to know about Government Debt Relief and Grants.

  • US Bank Home Mortgage

    US Bank Mortgage is home of the Five Star Service Guarantee. See what Bills.com rated US Bank Mortgage, and add your own personal feedback and rating.

  • HSBC Mortgage

    HSBC Bank USA Inc. is one of the nation\'s 10 largest banks. HSBC Mortgage offers a full suite of mortgage and refinance loan products. Read what our users have said and how they rated HSBC Mortgage.

  • + If the bank forecloses on my home and sells it, do I owe anything else?

    Each foreclosure situation is different. Historically, the market value of property was greater than the balance of all mortgages. In normal times, the sales price minus the repossession and liquidation costs was more than the outstanding balance. In recent times with the drop in market prices, the balance of the mortgage(s) exceeds the value of the property. In this situation, the foreclosure and subsequent sale will result in a deficiency balance. The homeowner has liability for the deficiency balance, except in states that outlaw the collection of deficiency balances.

  • + Is it necessary to use my original lender to refinance?

    While it is not necessary to refinance with your original lender, doing so may be an easier process and give you more leverage. It is usually more costly for a lender to find a new customer than to keep a customer it already has, so you may be able to negotiate a better price. In addition, if you go with a new lender, you may have to go through a new property appraisal and other hassles that can probably be bypassed with your original lender.

  • + What happens if I default on a home equity loan?

    Your second lender can take your home if you default. Proceeds from the foreclosure sale will first go to your primary lender. Your second lender will be paid with whatever proceeds remain after your first mortgage is paid off

  • + What is a 'freeze' on a HELOC?

    A freeze is when the lender stops your use of the credit line, preventing you from increasing the balance owed. Freezes have been quite common, as home values have dropped, as lenders seek to reduce their exposure. Lenders can freeze the credit line if they have a reasonable suspicion that you will not repay the loan.

  • + Will a foreclosure affect my credit?

    Absolutely. A foreclosure is a negative mark on your credit report and will decrease your score. Ideally you do not want any foreclosures on your credit report. A foreclosure will appear on a credit report for 7 years.

  • + Will My Bad Credit Prevent Me From Refinancing?

    Bad credit wil not necessarily hinder you from refinancing your home. It just means you will not get the best interest rate possible. However, if your credit is really bad, it may not be possible to qualify for a loan with an interest rate that saves you money.

  • + Assumption

    A qualified buyer may be allowed to assume (take over) your mortgage. Ask your lender whether this option is available to you.

  • + Bankruptcy

    A type of aggressive consumer debt resolution where you attempt to either liquidate your debts through a chapter 7 bankruptcy, or re-organize your debts into a payment plan through a chapter 13 bankruptcy.

  • + Declaration of Default

    An instruction issued by a lender to a trustee to initiate foreclosure against a borrower who has defaulted on the payment terms of a mortgage.

     

     

  • + Deed-in-lieu of Foreclosure

    You may be able to "give back" your property to the lender, who then forgives the balance of your loan. Again, there may be income tax consequences, so check with the IRS. This option will not save your home, but it is less damaging to your credit rating. Some lenders impose certain restrictions on taking back property. For example, they may require that you try to sell your home at a fair market value for at least 90 days.

  • + Default

    Failing to pay a loan for a significant period of time. Once you default on a mortgage loan, foreclosure proceedings can come into effect.

  • + FHA

    The Federal Housing Administration (FHA) was established in 1934. The FHA insures loans made to borrowers by banks and other lenders. FHA insures loans for home construction, home purchase, and refinance loans. The FHA does not issue loans. The FHA is a part of the U.S. Dept of Housing and Urban Development that insures certain mortgages. Although the FHA does not fund loans, it does establish underwriting guidelines and construction standards for loans it guarantees . By guaranteeing the loan, the FHA gives lenders the confidence that the loan will be paid, even if the borrower defaults on the loan.

  • + Forbearance

    Your lender may be able to provide a temporary reduction or suspension of your mortgage payments for a short period, such as 3 or 4 months. After this time, your lender will work with you to create a repayment plan for the loan. You may qualify for forbearance if you have experienced a reduction in income (for example, if you have become unemployed) or an increase in living expenses (for example, higher medical bills). You must provide information to your lender to show that you will be able to stick with the new payment plan.

  • + Judicial Foreclosure

    If the mortgagor (the borrower) defaults (fails to make the monthly mortgage payments), the mortgagee may reach the land to satisfy the debt. In some states this is accomplished with a a judicial foreclosure. This is a lawsuit in which the mortgagor is evicted and the property is sold under the supervision of a government official, such as a sheriff. A judicial foreclosure can start 120 to 180 days following a default.

  • + Lien

    A collateral claim against property. Mortgages and car loans are voluntary liens. Judgments and tax liens are involuntary.

  • + Loan Modifications

    Your lender may be willing to rewrite the terms of your original mortgage loan to address your financial situation. A loan modification is designed to make your monthly payments affordable. Changes to your loan may include extending the number of years to repay and changing the interest rate, including changing an adjustable rate to a fixed rate. You may have to pay a processing fee to obtain a loan modification.

  • + Loss Mitigation

    Loss mitigation is the process by which banks try to cut their losses on loans that are not being paid back as agreed. During the loss mitigation process, the lender works with the borrower to find a mutually acceptable solution. If a solution can't be found that keeps the borrower in the home, such as a loan modification or forbearance, the lender may compel a solution the forces the borrower from the home, such as a foreclosure or short-sale.

  • + Market Value

    Market value is the dollar price that a property will sell for, when both the buyer and seller are acting in their own best interests and are unaffected by undue pressures.

  • + Mortgage

    A mortgage consists of two documents: a note (or bond); and the mortgage itself. The note is the buyer’s personal promise to make the repayments. If there is a foreclosure against the property and the foreclosure sale does not yield enough to cover the outstanding mortgage debt, the note serves as the basis for a deficiency judgment against the borrower for the balance still due. The mortgage itself is a document that gives the lender the right to have the property sold to repay the loan if the borrower defaults. Since the mortgage in effect gives the mortgagee (the lender) an interest in the land, the mortgage is recorded at the county clerk’s office.

  • + Mortgage Disability Insurance

    when a home owner suffers a medically verifiable illness/disability and thus cannot work, this type of insurance covers a specified number of payments.

  • + Non-Prime

    In mortgage terminology, non-prime is another word for subprime.  Non-prime loans are loans that are available to higher risk borrowers, such as borrowers with: limited credit history, high debt to income ratios, blemished payment history, and a recent bankruptcy filing.

  • + Non-Recourse Loan

    A non-recourse loan is a loan where the creditor's ability to collect on a defaulted loan is restricted to any assets used to secure the loan. With a non-recourse loan, if the lender forecloses, then it cannot get a deficiency judgment and attempt to collect it from the borrower. Whether a loan is recourse or non-recourse depends on the state you reside in and the specific terms of the loan.

  • + Partial Claim

    If your mortgage is insured by a private mortgage insurance firm, your lender might help you file a claim. Some insurers provide a one-time, interest-free loan to bring your account up to date. The interest-free loan is due when you refinance, pay off your mortgage, or when you sell the property.

  • + Premium

    payments made by the insured in order to own the policy.

  • + Private foreclosure

    A deed of trust allows the trustee to sell the property in a private sale if the borrower defaults. The private sale must occur in a commercially reasonable manner so as to bring the highest price possible. A private sale may occur as soon as 60 days following a default.

  • + Recourse Loan

    A recourse loan is one where the lender has the legal means to collect the deficiency balance from the borrower.

  • + Reinstatement

    Lenders are often willing to reinstate your loan if you make up the back payments in a lump sum by a specific date. A forbearance plan may accompany this option.

  • + Repayment Plan

    Your lender may agree to a plan that includes your regular monthly payments plus a portion of the past due payments each month until your payments are caught up.

  • + Sale

    Your lender will usually give you a specific amount of time to find a buyer and pay off the amount you owe on your mortgage. Your lender may require you to use a real estate professional to help you sell the property.

  • + Short Sale

    If you can't sell the property for the full amount of the loan, your lender may accept the amount you get for the selling price, even if it is less than the amount you owe. You may owe income taxes on the difference between the amount you owe and the amount you are able to pay back. Check with the Internal Revenue Service for tax information.

Business Ratings and Reviews

Deciding on which company to go with to meet your financial needs? Get the inside scoop on a company and read unbiased consumer ratings and reviews from the Bills.com community. Find out how a company ranks in several customer satisfaction categories to help you find the right provider for your needs. Then help the community out by providing your own reviews.

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