What about Federal Bailout Programs?

Your bank’s workout programs - Many of the largest banks and mortgage lenders have now realized that they are better off renegotiating your mortgage into one that you can afford than they will be if they foreclose on the property. So, contact your lender first to see if they have a workout program and if you qualify.

What will you need to have ready when you ask your bank for a workout or change to your mortgage? Click here for a list of things to get ready for either a workout request or to negotiate a short sale.

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Are there non-government workout programs, too?

The Obama plans to aid homeowners

 

President Obama’s Homeowner Affordable Modification Program (HAMP) has now replaced earlier plans and is the way that distressed homeowners might be able to get relief. You should go to this government site and read through the program to see if you are eligible. There are some great videos there to help you understand this programs and whether you qualify. And if it might be a way to avoid going any further here.  A short sale is only the answer if you are already sliding into foreclosure, with no way to save the house. It’s always better if you can find a way to save the house that works for you. You should exhaust all alternative to either foreclosure or a short sale.

Starting in April , 2010, a new Federal program called Home Affordable Foreclosure Alternatives will encourage lender to facilitate short sales and the deed-in-lieu as alternatives to foreclosure. Read more about that program by clicking here.

 

Here’s a new government site that is aimed at providing information
 To those who may not yet be in default but who need to refinance in
 Order to stay in their homes check it out click here or on the logo above
What about credit counselors and workout companies?

In general I recommend against using the for-profit workout companies or counselors. There are lots of really good ones and honest companies; however there are also lots of really sleazy operators out to make a buck off the misfortunes of others.

 

Try these non-profits first, to see what they advise. If they tell you that they can’t help, it is unlikely that some for-profit company will magically be able to help instead.

Loan Modification Hope
Springboard Credit Counseling
Foreclosure avoidance counseling for Michigan
Foreclosure avoidance for other states - pick your state
Hope Now Program
Oakland County Michigan Mortgage Counseling

From the HUD Web site come the following links to information about the various scams that unscrupulous people may try to pull on you

Warning: Foreclosure Scams  

  * Loan Servicing Scams

  * Foreclosure Rescue Scams: Another Potential Stress for Homeowners in Distress

  * Mortgage Fraud Information from the FBI

  * Consumer Tips for Avoiding Foreclosure Rescue Scams  

Avoid Foreclosure - Advice from HUD - Read through the links on this page
Beware the scammers

Click here for the NAR brochure (PDF) on the Foreclosure Alternatives program - HAFA