Foreclosure Assistance Available

If you are having trouble making your mortgage payments , have already fallen behind or are in default or foreclosure, you may feel scared, ashamed or overwhelmed. It is very important that you act quickly to communicate your situation clearly to your lender and reach out for the help you need.  The longer you wait, the fewer options you may have to save your home or avoid foreclosure.  Here are some tips on the steps to take if you find yourself in this situation:

ACT QUICKLY

If you fall behind on your payments, you can
expect most lenders to react quickly. Below is
a general time line of what may occur following
your first late payment and ending in foreclosure.

The foreclosure process in New York currently takes about 445 days (15 months) from the date of the first missed payment to the sale of the home.

Foreclosure sales in New York are by public auction, usually at a county courthouse. The home is sold to the highest bidder and anyone, including the lender, may bid. Once payment is made and the sale is complete the winning bidder takes ownership of the property.

Once a sale is complete, you have no right of redemption.  You lose your house.

CONTACT YOUR LENDER OR LOAN SERVICER IMMEDIATELY

It is crucial that you contact your lender or loan servicer as soon as you realize that you are unable to make a payment. This is a crucial first step in addressing your situation and identifying possible solutions .

It is very important that you respond to mail and phone calls from your lender. If your lender does not hear from you, they are more likely to start legal action leading to foreclosure.

Provide any information requested by your lender or servicer quickly and keep records and copies of everything .

KNOW YOUR OPTIONS

Refinancing: Refinancing options are not as widely available as they had been in the past.  You should still check to see whether your lender or another lender will refinance your mortgage.

Repayment plan:  The lender may agree to a repayment plan.  Under a repayment plan, the lender will divide the late payment(s) up and add them on to future monthly payments.

Forbearance: The lender may agree to temporarily agree to reduce or suspend monthly payments for a period of time - such as six months.  At the end of the forbearance period, regular payments will resume with missed payments added on.

Loan Modification: The lender may agree to adjust the terms of the loan to make it affordable. They may lengthen the term of your loan, lower the interest rate or fold the past due amount into the loan and re-amortize the new balance (i.e. recalculate your payment schedule) so that you can pay the additional debt back over time.

Home Affordable Modification Program (HAMP) is a loan modification program that is part of a federal stabilization plan called Making Home Affordable. You may qualify for a HAMP modification if your home is your primary residence, the amount you owe on your first mortgage is equal to or less than $729,750, you got your mortgage before January 1, 2009 and you are paying more than 31% of your current gross income on your first mortgage (including principal, interest, taxes, insurance and homeowner’s association dues).

Home Affordable Refinancing Program (HARP) , also part of the Making Home Affordable plan, is a refinance program designed to help homeowners with loans guaranteed or owned by Freddie Mac or Fannie Mae. You may be eligible for refinancing under HARP if you own a 1-4 family dwelling, your first mortgage does not exceed 125% of the current market value of your home and you haven’t been more than 30-days late on your mortgage payment in the last 12 months.

Short sale/ Deed in lieu of foreclosure: In a short sale the lender agrees to let you sell the house for less than the outstanding loan amount. The lender then takes the proceeds from the sale and forgives the remaining debt. With a deed in lieu of foreclosure, you surrender the home to the bank and they sell it.

Bankruptcy: Filing for bankruptcy will temporarily halt the foreclosure process and may force the mortgage lender to accept a more borrower-friendly repayment plan.  But a bankruptcy should only be considered as an absolute last resort. A bankruptcy will remain on your credit report for ten years.