Getting Relief from Home Foreclosure

Posted by: Desiree B. | Jan 15,2008

I’ve been doing a series on how to avoid home foreclosure this week. With the rise of sub-prime loans, high interest loans given to borrowers with poor credit scores or low income, foreclosures have been steadily rising for months. The Mortgage Bankers Association says that subprime mortgages only account for 13% of home loans but that 55% of foreclosure starts stem from subprime mortgages. More tips on what you can do to avoid home foreclosure:

 

Communicate with your mortgage company when you’re trying to avoid foreclosure. A recent study shows that 60% of homeowners who declare foreclosure never spoke with their lenders. Of people who did talk to their lenders, 80% got some sort of “relief,” or creative solution to avoid home foreclosure.

 

Find out if you can refinance your home loan to get a better interest rate and to lower your monthly payments. Some homeowners who were given subprime loans were eligible for prime loan rates. Two lenders estimate that as much as 50% of the subprime mortgages they purchased in 2005 were from homeowners who were eligible for prime loan rates.

 

Subprime mortgage companies target neighborhoods where prime lenders don’t advertise. So some people, including people who may not know enough about credit scores and prime mortgage eligibility, were given home loans with high interest rates. If you refinance your subprime mortgage and get prime loan rates, you’ll pay less overall for your home and you can potentially lower your monthly payments to avoid home foreclosure. 

Sponsored Resources Ads by Google