There are several options available to Oklahoma distressed homeowners including a mortgage modification, refinance, short sale, reinstatement and forbearance. The other way to approach negotiations with your lender is to determine if they violated any truth and lending laws or disclosure laws at the time they made your original loan. This requires the expertise of a foreclosure defense attorney who can perform a forensic loan audit on your behalf. If the attorney finds evidence that your lender committed predatory loan practices or violated the lending and disclosure laws, you may be entitled to a refund of your fees, interest, a principal reduction on your loan balance or cancellation of your loan. So before you start negotiating other options with your lender, talk to an attorney first.
If the lender did not commit any violations, then you have other options such as:
A loan modification is one of the most common options used to help Oklahoma homeowners stay in their homes by the lender agreeing to reduce the interest rate, extend the loan term and sometimes reduce the principal balance so that the homeowner can afford the new mortgage payment. However, the modification is just a temporary fix for the homeowner who needs to have a steady income so that they can continue to make their mortgage payments and not go into default again.
Requires lender approval to sell the home for less than the borrower owes the lender on their loan balance. Be sure to get something n writing that your lender agrees that the sale proceeds satisfy your loan and that they report tit as paid or satisfied on your credit.
Since interest rates are so low, refinancing makes sense if you qualify for an interest rate reduction of at least 2%. The government has programs to help upside down homeowners refinance if their mortgage balance does not exceed 125% of the home’s current market value, and you must meet certain other criteria. Talk to your lender so see if you qualify for a government program. If you have equity, then you just need to talk to your lender about their refinancing guidelines to see if you are eligible.
The following government programs are available:
Home Affordable Modification Program(HAMP). You may be eligible to apply if you meet all of the following:
- Must occupy the home as your primary residence.
- Mortgage must have been obtained on or before January 1, 2009.
- Your mortgage payment must be more than 31 percent of your monthly gross income.
- Your loan balance is up to $729,750.
- You are experiencing a financial hardship.
- Have not been convicted of a crime regarding forgery, money laundering, mortgage theft or fraud regarding a real estate or mortgage transaction in the last 10 years.
Principal Reduction Alternative (PRA). Available to borrow whose loan is not owned by Freddie Mac or Fannie Mae and meet the same eligible requirements as HAMP.
Second Lien Modification Program (2MP). Available if you have a second mortgage and are participant into eh NAMP program.
FHA Home Affordable Modification Program (FHA-HAMP). For FHA borrowers.
Veteran's Administration Home Affordable Modification (VA-HAMP). For VA borrowers.
A reinstatement means you just pay the past due amounts that you owe the lender, and the lender reinstatement your mortgage to current statue.
Bankruptcy is a serious decision and is used as a last resort. If you have other debts besides your mortgage that are overwhelming you, and you can no longer afford to make those payments as well, then filing bankruptcy may be the solution. A bankruptcy stays the lender from foreclosing on your home and prevents your other creditors from attempting to collect a debt against you. If your lender is willing to give you a modification, you may be able to keep the home after the bankruptcy if you can afford the new payments. It is best to talk to a bankruptcy attorney to see what options are available.
Lenders are willing to talk to you about ways to keep you in your Oklahoma home because they already have too many foreclosures on their books and don’t want more. So finding a solution is preferred by the lender as well. It is recommended that you seek legal help with the negotiations because the lender will take you more seriously and not take advantage of the fact that you do not know the laws. You will get better results with the proper legal representation and someone looking out for your best interests.