Dont let the bank take your home! Dont go into denial, hoping that everything will turn out all right; it wont, unless you take action, quickly. More government programs will be available to you the sooner you act. You see, when a borrower stops making their mortgage payments and subsequently loses their home to foreclosure, the government loses too. The Federal Government, both directly and indirectly, has a financial interest in virtually every residential mortgage issued nationwide. The Federal Home Loan Bank Board (FHLBB), a Federal Agency, insurers the millions of VA and FHA home mortgages. These mortgages have the highest default rate of any type of mortgage. When one of these mortgages goes bad, the servicing bank forecloses on the mortgage and sells the property at auction. If the property sells for less than the balance owed on the mortgage, the FHLBB has to make up the difference to the bank. This situation will soon become commonplace as the real estate market sinks under the weight of its own excesses. Fannie Mae and Freddie Mac, two Government Sponsored Enterprises (GSE) that supply money to the banks to make mortgage loans, guarantee or insure the bulk of the non-FHA mortgages. These GSEs are contractually obligated to step in and make up missed mortgage payments to the banks if the borrowers do not make the payments. They must also cover 20% of any loss sustained by a bank that forecloses one of their mortgages when the sale of the property does not fully pay off the mortgage balance. Since these agencies have so much to lose when a homeowner defaults, it is possible for the knowledgeable homeowner to get help from them to avoid foreclosure. It is demonstrably cheaper for the agency to help the homeowner with a grant to cover mortgage arrears rather than having to reimburse the banks loss on a short sale. These grants do not have to be repaid in many cases. Other agencies will make loans to the embattled homeowner which do not have to be repaid until the house is sold or refinanced. At the very least, most agencies have workout programs that temporarily suspend or lower payments that allow the delinquent borrower to catch up. We have even heard of situations where the government agency will bully banks into accepting payments from borrowers after they told the borrower they would not accept them. However, there are a few problems homeowners may face when seeking help from the Government with their foreclosure problems. One problem is that each agency has its own rules for qualifying for each option. A major requirement is the amount of delinquency, but there are other guidelines as well. Among them are whether the borrower is employed, how much cash, if any he has and the nature and duration of whatever caused the problem in the first place. Finally, the borrower has to be aware the programs exist, as you now are; then you have to be able to find the right person in the right department to help you. After all, these are Government Agencies! Although you can certainly contact the various agencies mentioned in this article directly, they are all on the web; you might want to seek out professional representation to make sure your situation is presented in the best light to the right person at the right agency. In any event, act now. The longer you wait to seek help, the fewer chances you will have to save your home! |
