Know your monthly budget

The Federal Government recently designed a program to specifically help troubled borrowers save their homes from foreclosure. That program is called "Hope Now." The program creates an income budget that will be useful to homeowners to calculating what they can afford monthly for their mortgage payment. Please visit the web page, www.housinghelpnow.org as it will give you a guideline on what you can afford to pay based on your monthly income.


Contact your lender's Loss Mitigation Department

Once you know your monthly budget, contact your lender's Loss Mitigation Department. Since property values are declining, it will not be of a surprise that most lenders are beginning to work with troubled borrowers in coming up with a program that will help the borrowers save their homes. Your lender may offer a loan modification program, in which you receive a new term and interest rate for your home. Some lenders are offering a graduated payment, in which the borrower pays interest as low as 1% for the first 24 months, 2% of interest for the next 36 months, and a fixed interest as low as 5% for the remaining life of the loan. A lender may offer the troubled borrower a principle reduction. The lender may require a recent appraisal to reflect the new value of the property, so that the principle of the home may be reduced to reflect the new value in the declining value. This helps homeowners who have bought over the last few years, at the top of the real estate bubble. Finally, the len


Consider a short-sale.

A short- sale may allow the borrower to avoid a deficiency judgment and it allows the borrower to be released from the liability of the mortgage debt. This may be a useful tool, especially in areas, where the property values have declined substantially over the years, and there is no possibility of selling your home for the amount that is owed on the mortgage and note.


Contact a Consumer Attorney who can help you save your home through the judicial process and who can negotiate on your behalf with the lender

An attorney who practices foreclosure defenses on a regular basis will be able to help the homeowner explore his best options which includes but are not limited, to loan modification, avoidance of a deficiency judgment, credit restoration, and even suing the lender for damages under certain law and equity. A consumer attorney may also be able to provide you with leverage in negotiation with the lender. Additionally, a consumer attorney could be useful in helping you to get the extra time you deserve in saving your home by filing affirmative defenses and raising equity concern that the judge may grant.