Even with the recovery of the housing market, many homeowners are still financially struggling with their mortgage payments. Of course, homeowners who are underwater with their mortgages are fighting to avoid a foreclosure, but with so many options available, it can be difficult to make a proper decision. Furthermore, foreclosure law and predatory lending make this a difficult market for struggling homeowners. For those seeking to avoid a foreclosure, knowing the most popular mortgage debt solutions provides many options moving forward.
Mortgage Debt Solutions in 2013
Mortgage debt solutions in 2013 provide a vast variety of options for homeowners. Working with a bankruptcy or foreclosure attorney can help homeowners decide which of the following solutions is best for them.
1. Mortgage modification. This is a mutual agreement where one or more terms concerning the repayment of the loan are modified. To qualify, borrowers must be able to verify their financial ability to repay as well as make the case as to why the terms must be changed.
2. Refinancing. A homeowner with good credit and a good history of payment can refinance the property and take advantage of lower interest rate possibilities.
3. Reinstatement. This solution is only available for homeowners who were late on payments because of a temporary situation. If you were late on a payment, you can reinstate the loan with the previous amount due with any late fees by a date that you and your lender agree upon.
4. Repayment plan. If you’ve missed mortgage payments, negotiating with your lender can help you make up missed payments over time.
5. Forbearance. One of the biggest considerations of forbearance is that it’s a temporary agreement until permanent terms can be agreed upon. However, this allows homeowners a period of time to reestablish their finances.