If you’re behind on your mortgage, or even facing foreclosure, you may want to consider a loan modification. This will change the terms of your mortgage, often catching you up on missed payments and saving your home. The first step in the process is, of course, contacting your lender. However, before you get started, it’s good to know the answers to some common questions about adjusting your mortgage.

First of all, if you’ve accrued any late fees on your mortgage, HUD requires that your lender waives those fees for your loan modification. This is good news for you, as late fees can run into the hundreds, and even thousands of dollars. However, in order to get the modification approved, you’ll have to supply your lender with proof of income and other financial information in order to show that you’re able to make the new payments.

Further, you don’t even have to be currently late on your payments to apply for a modification. All you need to do is show your lender that you’re no longer able to afford the mortgage payments as they currently exist. If you’re falling behind on payments (or about to) due to a divorce, death of a co-borrower, job relocation, illness, or military service, your lender will give you special consideration in the modification approval process, as these circumstances are considered hardships. You’ll need to supply a letter detailing your hardship when you send in your application.

Missed payments can often be worked back into the new loan and spread out over a period of time to help you get back on your feet. The entire purpose of a loan modification is to stop foreclosure and get you current on your mortgage again, so lenders are willing to do what is necessary to make this happen, as long as your requested terms are reasonable.

be aware that your lender will usually require a large up-front payment to get the loan modification process started. However, if you’re in real need and your income qualifies you, that large fee will most likely turn out to be money well spent as you’re given the chance to save your home.

This is the seventh installment in our foreclosure series. Be sure to check back for updates…

What happens after foreclosure? Most of us know that foreclosure is the process through which a lender takes legal ownership of a home to recover the cost of an unpaid mortgage. It’s an ugly situation that no homeowner wants to find himself in, but that’s becoming more and more common as the nation’s housing crisis deepens. In fact, hundreds of thousands of foreclosures are filed by lenders each month, and that number is growing. Most people try to stop the loss of their home to the bank, either by working out a payment arrangement or selling the property. Very few really know what happens if the foreclosure goes through. For homeowners facing this prospect, this is very important information.

When a foreclosure runs to its conclusion, one of four things usually happens:

*The homeowner pays off the mortgage, usually through a refinance, but sometimes through cash. Once the mortgage note is paid off, the foreclosure becomes null and void. The homeowner can pay off the mortgage at any point during the proceedings, right up until the time the bank takes possession of the property.

*The homeowner sells the property for the full amount of what’s owed on the mortgage. Again, this pays off the loan and stops the bank from taking possession. The house can be sold by the homeowner at any point, right up until the foreclosure auction.

*The home is sold at a public auction. Depending on the state, this auction may be held on the courthouse steps, at the home, or elsewhere. The highest bidder gets the deed to the property, and is usually required to pay cash.

*The bank takes possession of the property.  This usually happens when there are no bidders on the property at the auction, or no one bids high enough to satisfy the lender. Banks can also take possession of the property through a deed in lieu of foreclosure arrangement with the homeowner (the homeowner gives the deed to the lender on a voluntary basis). Once the bank owns the property, it becomes known as a REO (Real Estate Owned by lender), and the lender is responsible for its upkeep and maintenance. As can be imagined, lenders typically try to sell REO properties as soon as possible, as these are a great expense to them.

After the foreclosure has been completed, there may be a redemption period in which the homeowner can still reclaim the home. Not every state has a redemption period, so be sure to check your own state laws if you’re facing foreclosure. Redemption periods can last from a few days to a month or more, and you can not be evicted from your home during this time, even if the home has been sold at auction. If you’re able to come up with the money to pay off the mortgage during the redemption period, you get to keep ownership of your home. If your state has no redemption period, then you’ll likely have to leave the house as soon as the foreclosure sale is complete. It’s important to know what happens after foreclosure, so you can be sure your interests are protected and your full rights are exercised during the entire process.

This is the sixth installment in our foreclosure series. Be sure to check back for updates…

Can bankruptcy stop foreclosure? That’s a question many of today’s unfortunate homeowners are facing. Bankruptcy is never something anyone wants to do. It’s a terrible blemish on your credit that stays there for 10 years, and can keep you from getting additional credit or good loan rates. Yet, losing your house is an even worse option, and the prospect of it leads many homeowners to consider options that would normally never cross their minds.

So, can bankruptcy stop foreclosure? The answer is yes and no. It all depends on what kind of bankruptcy you choose. Here are your two options:

1.  Chapter 7 Bankruptcy. In this procedure, all of your assets are liquidated to pay off your debts. The court normally then absolves you of the remaining debts that couldn’t be paid. For some people with no assets, all of their debt ends up getting absolved. A Chapter 7 filing will usually put a temporary stop on foreclosure proceedings, while the case is moving through the court. This may give you some extra time to work out a payment arrangement with your loan company or to sell your home. However, once the bankruptcy case is closed, your lender can resume proceedings against you if you haven’t taken other measures to make good on your mortgage payments.

2.  Chapter 13 Bankruptcy.  If you want to stop your foreclosure through a bankruptcy filing, this is the way to do it.  A Chapter 13 is a re-organization of your debts. Your debts are often consolidated, and you make a monthly payment to the court until your obligations are paid. You can usually include your mortgage in with your other debts, which forces your lender to accept a payment plan from you. You’ll be able to make up your back payments and get back on track with your mortgage this way, and your lender can’t take your home as long as you make your payments to the court on time.

The most important thing to remember is that you need a qualified bankruptcy attorney to navigate this complicated process for you. Fortunately, you can often retain this kind of attorney for less than $500. If you’re facing the loss of your home, it’s definitely worth the money. It will take several months for your case to go through the court system, and your attorney will make sure you understand every step of the process. If you’ve wondered, “Can bankruptcy stop foreclosure?,” you now know the answer. If you’ve decided this may be a good option for you, consult an attorney in your area for more detailed legal advice regarding your particular situation, and get yourself on the road to financial recovery while keeping your home!

This is the fifth installment in our foreclosure series. Be sure to check back for updates…

In Part 1 of “How to Stop Foreclosure,” we discussed several top techniques for keeping your home, including payment plans, refinancing, renting it out, and selling it. Now, we’re going to discuss some other methods you can use to keep the bank at bay.

5.  Do a short sale. A short sale is what happens when you sell your house for less than the amount you owe on the mortgage. This type of sale is becoming more and more common as foreclosures rise. However, it requires the approval of your bank to do it. Some homeowners try to sell their homes at full price, then ask the bank to do a short sale if they get an interested buyer offering something less. This isn’t the preferred method of doing a short sale. Instead, you should get approval for a short sale first, then put the house on the market at full price, knowing you can sell it for less. You could also put the house on the market at a reduced price and advertise it as such, so potential buyers think they’re getting a bargain.

6.  Offer your bank a deed in lieu of foreclosure. Among the various methods of how to stop foreclosure, this is the least desirable, but still better than losing the house outright. It should be used as a last resort, since it damages your credit (but not as much as if you lost the house through a foreclosure sale). This method is essentially a voluntary repossession of your home. You give the deed and keys back to the bank in exchange for them writing off your loan. This allows you to walk away without owing any money, and get a fresh financial start.

7.  Hire a foreclosure specialist. While it will probably cost you several hundred dollars, the efforts of a foreclosure specialist can be well worth it. A specialist can often negotiate loan workouts with your bank where you can’t. This is because a specialist knows all the legal terminology involved in real estate transactions, and also knows what banks want. A specialist can speak to banks in their own language to get you the loan workout you need to stay in your home, or to at least put off foreclosure long enough for you to make alternate living arrangements.

If you need to learn how to stop foreclosure, it’s better to start educating yourself right away. The longer you wait to do something, the less likely the bank is to work with you. Banks want to save money and do things that will benefit their bottom lines. If the bank has already started proceedings against you, then they’ve already spent money on taking back your home. If you get to them before they spend this money, then your chances of keeping your home become much higher. So, if you’re facing foreclosure, NOW is the time to do something about it!

This is the fourth installment in our foreclosure series. Be sure to check back for updates…

If you’re looking for information on how to stop foreclosure, you’re not alone. In the month of October 2008 alone, over 300,000 foreclosures were filed in the United States. Each month, the number of foreclosures only continues to rise as unemployment skyrockets and prices on consumer goods go higher and higher.

If you’re in the position of facing the loss of your home, you’re probably desperate to find a solution. The loss of your home is one of the most devastating things a person can experience, especially if you don’t know where you’ll go next. Fortunately, there are things you can do to stop the process in its tracks. You don’t have to just sit back and lose your home. You can learn how to stop foreclosure.

Steps to Stopping the Foreclosure Process

1.  Don’t ignore letters and phone calls from your bank. This will only exacerbate the problem, as your bank will think you’re unwilling to work something out with them. The bank will be quicker to file legal paperwork against you, and will be able to show that you did nothing to try to remedy the situation. Respond to correspondence from the bank, let them know about your financial situation, and see if they’ll work with you on it. You’d be surprised at how often the bank is willing to come up with a solution for you, such as allowing you to pay back arrears in monthly installments or tacking missed payments onto the end of the mortgage.

2.  Try to refinance. Many people who are in foreclosure situations today are there because they got into adjustable rate mortgages that had low payments to begin with, but that have gone up too high to pay now. If you can refinance your mortgage at a lower rate, you’ll have a much better chance of being able to stay in your home.

3.  Rent out your house. Some homeowners choose this option if they want to keep their home, but can’t afford the payments. By temporarily moving out into a smaller place and renting out your house for enough to cover the mortgage payment, you can keep the bank at bay until your financial circumstances are on track again. However, this will only work if you can get the bank to work out a payment plan with you on any late payments.

4.  Sell your house. It may come down to either selling your house or losing it. If this is the case, selling is the better option, since that won’t damage your credit, while losing it will. If you can sell for enough money to cover your entire mortgage, then that’s the best solution. If not, then try doing a short sale, if your bank will allow it. In Part Two of “How to Stop Foreclosure,” we’ll discuss short sales and other powerful techniques for putting a stop to the bank’s efforts to take your home. You don’t want to miss it!

This is the third installment in our foreclosure series. Be sure to check back for updates…