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Your lender is
eager to work with you to cure your default! That's right! They want to help you get your payments
back on track. They don't want your house, they want your interest payments. Your lender may offer several plans to help you
get caught up on payments to bring your loan current.
Listed below are a number of programs your lender may offer
you. If they don't offer, ASK! Remember, it's your home.
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The Forbearance Agreement:
With a typical forbearance
agreement your lender will ask for some cash upfront. They will then take the remaining portion of your past due payments,
add late fees and other charges and divide those into monthly payments, payable over 6 to 36 months. These payments will be
due in addition to your regular mortgage payments. This program works well for homeowners who have had a temporary setback
and are now able to resume paying their mortgage.
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Special Forbearance Agreement:
If you have a HUD backed
loan and are experiencing a temporary financial setback, your lender may agree to reduce or suspend your mortgage payments
for up to 18 months. You must be able to resume your regular monthly payments within 18 months and execute a written forbearance
agreement.
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FHA Recast - Loan Modification:
Your lender may agree
to modify the terms of your loan, often lowering the mortgage payment to allow you the opportunity to remain in your home.
There are different ways to do this: Your past due amount may be placed on the back of your loan. Your lender may also extend
the length of time remaining on your loan or even lower your interest rate to make remaining in your home more affordable.
To qualify for this, you must be able to show accessible income, while not sufficient to support the original loan, would
support the modified mortgage.
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FHA's Partial Claim Provision:
This plan involves HUD
actually stepping in and paying the money to bring your loan current. In a partial claim, HUD pays your lender the amount
of money you owe in back payments. However, they cannot include any late charges, administrative costs or foreclosure fees
and costs. It can only include principle, interest, taxes and insurance fees. You would be required to pay upfront any other
fees which have accrued during your delinquency.
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There
are other programs for which you may be eligible. The VA has their own programs, as does the Farmer's Home Administration.
Keep in mind, most of these programs require you to show sufficient income to resume your monthly payments PLUS
pay extra money each month for the forbearance agreement. Many also require as much as 50% of back payments to be paid up
front in cash, before an agreement can be finalized.
If none of these options will work for you, contact a local
investor. You may be able to work out a lease-option deal where you can get your equity from your home a few years down
the road without being responsible for the payments now. If all else
fails, an investor may be able to work a short sale. You cannot profit from a short sale, but it does prevent a foreclosure
from slamming your credit report. Feel free to call Homestead Properties
today at 406-281-2408 for more information. No cost; no obligation! We
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