Homeowner Assistance Programs and Options

Homeowner assistance is available for a variety of problems that many people may be facing in today’s tough economy. There are many opportunities available that may help to provide options and ways that you can benefit from the options. A homeowner assistance group typically has a counselor who can explain the choices you have and they are also experienced with what it takes to work with lenders so they can advise you on this as well.

One of the options that your homeowner assistance counselor can help you to understand is forbearance. This is when your lender will either permit you to reduce the amount of your payments or temporarily suspend them. The plan is written stating that you will pay the back payments. The payments will be determined by combining an installment plan of the amount you owe and the new payment.

This is a reprieve for many allowing them time to get back on their feet and save some money for their payments when they resume. The disadvantage is you will be making higher payments for a period of time until you pay back the amount that you were behind.

Another option that will be explained to you is a loan modification. This is often very helpful for those who can make payments, but just do not have enough money pay up their account and get it current. The lender can change the terms of your loan and put what you owe back into the amount of the loan. Then they can either extend the amount of time you will pay on the home or lower the interest rates making your payment more affordable.

A short sale is another option. This is typically used by those who cannot pay what they are behind or make the payments in the future; a lender may agree to allow a short sale. Because they are getting less than what was borrowed, they may not be willing to do this. If they are this can be beneficial to you. The lender can choose to forgive your debt using The Mortgage Debt Relief Act of 2007. This will allow you to establish your credit history and purchase another home in 2 years rather than 7.

Deed-in-lieu of foreclosure is another choice you will have if you are not able to keep your loan payments current. The lender will allow you to sign the deed to the property over to them and this keeps a foreclosure off your credit report. This is usually not done unless you have tried to do a short sale to no avail. This not only helps you but it can save the lender a lot of money since they do not have to foreclose on the property. Although this is an option to keep a foreclosure off your credit report, a short sale is generally better for you in the long run.