In an attempt to assist as many people as possible, we are providing the following information regarding solutions to the foreclosure epidemic that is sweeping our country.

Possible Solutions to the Foreclosure Dilemma:

Talk to your lender

Your lender does not want your home. Their interest is in recouping the loan (money) provided to you, the borrower, to secure your property. When facing financial difficulty, contact your lender to determine what options they offer. The most damaging action you can take in times of financial struggle is avoiding your lender. Your silence leads them to believe you have no desire to honor your agreement to repay the loan as promised. Please DO NOT avoid your lender.

Forbearance Agreement

This is an agreement entered with your lender to pay the arrearages (past due amount) on your mortgage over a specified time frame plus your normal monthly payment. The arrearage can be paid back over a 3-12 month period. The lender typically sets the time frame based on your financial situation. This repayment agreement requires a down payment. The down payment may be negotiable if you just speak with your lender. At the end of the forbearance term you will return to your regular monthly payments.

Example:

Arrearage (Past Due Amount): $6,000.00 Regular Monthly Payment: $1,200.00

Forbearance Agreement Payment Plan: 6 Month Repayment Plan

$1,200.00 – Regular Monthly Payment + $1,200.00 – Down Payment = $2,400.00

January - June (6 Month Payment Plan):                                                               $1,200.00 Monthly Payment + $800.00 FAP = $2,000.00

July: $1,200.00 Regular Monthly Payment

Special Forbearance Agreement

Some lenders are offering this option. This agreement does require a down payment. After making your initial down payment, the mortgage company will enter a 3 month repayment plan reducing your monthly payments. At the conclusion of the 3 month special forbearance period, the lender will consider a loan modification. This option can be exercised as far along in the process as 1 week prior to the foreclosure sale date.

Example:

Arrearage (Past Due Amount): $6,000.00  Regular Monthly Payment: $1,200.00

Forbearance Agreement Payment Plan: 3 Month Repayment Plan

$1,200.00 – Regular Monthly Payment + $600.00 – Down Payment = $1,800.00

March – May (3 Month Payment Plan): $800.00 - Reduced Monthly Payment

June: $1,200.00 Regular Monthly Payment – Loan modification kicks in

Loan Modification

The lender gives you a fresh start and reinstates your loan. All of the arrearages (past due) on the loan are rolled into or placed on the back end of the loan. This allows you to continue making your regular monthly payments.

Example:

Arrearage (Past Due Amount): $6,000.00  Regular Monthly Payment: $1,200.00

Deed in Lieu of Foreclosure

This option is available to those individuals who can no longer afford their monthly mortgage payments. You can offer to surrender the deed to your property to the lender to satisfy the outstanding debt.

Short Sale

This option is when your lender accepts a discounted payoff to satisfy your outstanding mortgage. This option can only be exercised if you have defaulted on your loan agreement (stopped paying your mortgage). Investors love this option. This option can also be exercised if you owe more on your property than it’s worth.  If you sell your home to an investor using this option, they may allow you to remain in the property and rent.  In some cases, the investor will enter into a lease w/option to purchase with you for the repurchasing of your home. 

Here are a couple of resources for those in foreclosure:

CCCC has received a $1,000,000.00 grant from Household Finance to assist those in foreclosure. Your delinquency cannot exceed 3 months to participate in this program. Please contact Ms. Vinson for additional information regarding assistance through this program.

Tammie Venson

Consumer Credit Counseling Services, 1200 Roosevelt Road, Suite 121, Glen Ellyn, IL 60137

888-845-5669 extension 1203, www.MoneyManagement.org

City of Chicago Foreclosure Assistance

Call 311 for information specific to your lender.

Remember, there are alternatives to foreclosure. Please watch this website for additional information.

For assistance, please contact us @ 877-276-7479 ext. 2 or email @ tdp@kingdomseek.org.