Losing your home is not something you plan for when acquiring a mortgage. Yet it is a fact of life that circumstances beyond your control may result in you defaulting on your loan and risking to lose your home.
If you live in Oregon, you have many options out, once you find yourself in the unfortunate situation of facing foreclosure.
The first and foremost thing to do, is to talk to your lender timorously so that solutions could be looked at to save both parties’ interests: the homeowner their home, and the lender their income derived out of the loan or mortgage.
One possible way out of your situation is to ask for forbearance. This is in temporary financial difficult times, where you can make arrangements for partial payments, or even no payments for a specified time, until such time as you can catch up with arrears on the default loan. Situations that will be considered when applying for forbearance are for instance where the homeowner has lost their job but have found another, but still need time to catch up.
Another option out is to seek loan modification, which if suitably negotiated, will eventually reduce the monthly payments owed by homeowners through adjusting existing rates, terms, and other conditions of an existing mortgage or deed of trust agreement.
Yet another way out would be to apply for refinancing. This would mean an entirely new mortgage or deed of trust for the homeowner, which might preferably offer better interest rate terms and a lower principal amount, making it easier for the homeowner to keep up.
Yet the key to all the above options remain early and honest communication with the lender.
The state of Oregon as well as the Federal Government have put measures in place to assist struggling homeowners to hold on to their homes. Certain homeowners may be able to find relief, if eligible, under one or more of the new laws in place.
- HOPE for Homeowners Act
Depending on eligibility, certain homeowners may be allowed to change their existing mortgage in respect of lower interest and a longer repayment term through their lender if they are backed by the FHA (Federal Housing Administration) - The Homeowner Affordability and Stability Act
Depending on eligibility, this will allow the homeowner to alter their existing mortgage that is more manageable for the homeowner on a month by month basis and therefore still keeping their home.
- The Emergency Economic Stabilization Act of 2008
The above extended some of the provisions of the Mortgage Forgiveness and Debt Relief Act into 2012 and offers tax breaks on debt forgiven related to default mortgages. The latter have previously been deemed taxable income under IRS laws
A homeowner can remain informed of all current and applicable laws they are eligible under for foreclosure relief and prevention, by consulting with a government sponsored counselor of the Department of Housing and Urban Development.
There are other ways to get out of foreclosure as well, however, the key is to consult early, to get professional help and to make use of the help that is available. Do not wait for foreclosure notification, take action and keep your home.