Now, a stop foreclosure loan is not something that a person with an upside down recently modified interest rate loan can get. In this situation, the homeowner truly cannot afford the property. They should be looking for a solution that either re-sets the mortgage or gets them out of the home.
Instead, a stop foreclosure loan can sometimes be obtained when a homeowner has a temporary setback, but can assume the responsibilities of the loan within six months. Some examples of this include:
· The homeowner has become unemployed but has reasonable re-employment options shortly.
· The homeowner has a temporary disability which renders them unable to work for a limited amount of time.
· The homeowner has major expenses in another area, usually healthcare, which must be met. Once these expenses are met, the homeowner can resume payments on the loan.
· Major, unexpected repairs must be made on the home. This can happen to only the home in question such as a roof collapse or can be the result of a natural disaster where a number of homes in the area have been affected.
It is also easier to get a stop foreclosure loan if there is a little bit of equity in the house itself. In this case, you can simply take out a home equity line of credit to cover the period in question. But, even if you don’t have equity, you can still sometimes get such a loan because banks have a lot of incentives to not let your home fall into foreclosure.
A stop foreclosure loan can protect a homeowner’s credit. A foreclosure is one of the worst things that can be on a person’s credit report. It can also protect the interest rate from re-adjusting due to late payments.
Banks are increasingly willing to work with homeowners on these kinds of lending solutions. One example of such a loan is where the bank simply tacks the payments due onto the back of the loan. A 360 month loan becomes a 366 month loan with a half year grace period.Banks and financial institutions are also willing to work with homeowners in this situation because they don’t want to assume any more homes than they already have. Bank owned homes number in the hundreds of thousands and many cannot be rented or sold. This has left many neighborhoods as virtual ghost towns.
They are also willing to issue a stop foreclosure loan because the federal and state governments are giving them both a carrot and a stick for doing so.
If you have a temporary situation which leaves you unable to make your mortgage but think that a solution might be found soon, contact your bank about a stop foreclosure loan.