The main goal of most Real Estate Investors (that I know) is to help people in need. And with today’s foreclosure epidemic, more and more investors are being contacted by owners who are facing foreclosure.

That being said, here are 10 options that people facing foreclosure might have to try in order to save their home. These foreclosure workouts assume an owner is going to work towards keeping and staying in their home. These options are best considered if a home has equity, if the hardship is temporary, and/or if financial recovery is in sight.

1. Full Reinstatement – Full reinstatement is the dollar amount (including payment, back taxes, insurance, penalties etc.) required to bring the mortgage loan current.
2. Forbearance – Mortgage forbearance agreements work hand in hand with other options. During a forbearance period monthly payments are temporarily reduced or put on hold for a limited and specific time period. (Even though payments due are on a postponed, the interest due continues to accrue.) Owners must work closely with their mortgage lender to arrange for this type of agreement. Depending on the situation forbearance agreements generally have a maximum time period of a 12 month delay.
3. Federal Housing Administration (FHA) Forbearance – If owners qualify and under very special circumstances (death of a contributor to the family income, severe disability, or natural disaster) an FHA insured loan forbearance period MAY be extended up to 24 months. This sometimes requires an upfront lump sum payment.
4. FHA Partial Claim – If owners qualify HUD also has Partial Claim assistance where HUD actually advances an interest free loan so owners can repay the past-due interest and escrow amounts. This will leave owners with another loan to pay, but it is interest free. This also immediately brings owner’s mortgage up to date.
5. Veteran’s Administration (VA) Loans – If owners have a VA backed loan mortgage lenders may be able to reduce their interest rate. They also may be able to take the past due mortgage amount, add it to the current principal mortgage balance, and recalculate or re-amortize the new loan. This could result in a lower monthly payment.
6. Assistance for Service Members on Active Duty – If payments are behind due to military service, homeowners should ask their mortgage lender about the Service Members Civil Relief Act (SCRA). SCRA allows active military members to suspend or postpone some civil financial obligations. The SCRA was designed to assist and protect important rights of active duty military members and reservists who are in active federal service. National Guard Members called to active state duty in response to a national emergency declared by the President of the United States are now recognized under the new statute as well.
7. Repayment Plan – Repayment plans immediately bring accounts up to date by re-distributing delinquent payments over a period of time (normally less than 12 months). The monthly amount is then added to the usual mortgage payment. A change to the interest rate or the term is made to allow owners to bring their loan current.
8. Loan Modification – Loan modification also brings accounts up to date immediately. But with a loan modification there is an actual change to the mortgage note itself by adding past due interest and past due escrow amounts to the unpaid principal balance and then re-amortizing (recalculating) it over the new term.
9. Full Payoff Refinance – Refinancing current loans would be paying it off with a new loan. The purpose of doing this would be to make monthly payments less expensive by extending the term and/or reducing the interest rate of the loan. This can be especially helpful in the cases where the original loan had an adjustable rate or an interest only mortgage where payments have increased as the interest rate has increased.
10. Reverse Mortgage Refinance – A reverse mortgage is a loan that allows homeowners who are at least 62 years old, to convert part of their home equity into tax-free* income – without having to sell their home, give up title to it, or make monthly mortgage payments. The loan only becomes due when the last borrower (s) permanently leaves the home. Refinancing would replace the current loan with a reverse mortgage loan. * Contact a tax accountant for full details.

While it is true that many Real Estate Investors are looking to profit from properties that have been foreclosed on by purchasing properties directly from lending institutions, it is also true that many investors will help owners try to save their home before it gets to that point.

Despite the news media who tend to give Real Estate Investors a really bad name, Real Estate Investors really do help people by buying their homes very quickly. Furthermore, in some situations Real Estate Investors help educate homeowners on some options that may actually help owners save their home from foreclosure.

Other than news reports on predatory lending (meaning when a dishonest financial institution intentionally misleads or deceives the consumer) what you will see over and over again is how to benefit from foreclosures.

Foreclosure Workshops, Seminars, and Products

Seminars, workshops and products are being sold to teach people how to buy and how to invest in the current foreclosure market. What we read on the internet, hear on the radio, see on the TV news largely concentrates on foreclosure investing. Late night infomercials are broadcast on TV about getting rich on foreclosure investing. They talk about buying houses cheap, and selling them for profit. There is great opportunity in the foreclosure market, to be sure, as real estate investors from Dubai snapping up foreclosed American properties can attest. The other side of the equation are the homeowners and businesses facing foreclosure.

Who is Helping Home and Business Owners Before Foreclosure?

The flip side to all this is the question of who is helping the homeowners before foreclosure? How is the public being eductated on what options might be available to them? Where can homeowners in distress get guidance? Do homeowners know how to save their homes or even where to begin?
You Trust The Same Institutions That Is Foreclosing Your Property To Educate You On How To Protect Yourself?

If you are facing foreclosure, can you depend on the same mortgage company that is foreclosing on your home or business to also to educate you on the process, and give you information on how to protect yourself? What do you think? Something is seriously wrong.

Education is Key to Protecting Yourself From Foreclosure!

In contrast to mortgage lenders and debt servicing companies, real estate professionals and bankruptcy attorneys, most homeowners know very little about the foreclosure process. Most people have never been through a foreclosure and will hopefully not ever have to go through it.

The foreclosure process is not simple and it’s not clear cut

What kind of loan do you have? How many mortgages do you have? How much equity do you have? How many liens are recorded on your deed or on your mortgage? What state do you live in? How far behind are your payments? Are you currently employed? Are you temporarily behind or is this new situation permanent?
There are lots of grey areas, many times the answer to a question is, “Well, it depends”.

At this time in your life, it be almost impossible for you to even think about what to do next, much less about making up past mortgage payments.

But the thing is, the more you know, the better prepared you will be and the more chances you have of stopping, or at the very least delaying, the foreclosure process.

The Time to take Action is NOW!

If your mortgage payment is more than 16 days late (yes, even just one time) and/or you know that you are not going to be able to pay the mortgage this month the time to act is TODAY!
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