The housing boom led to a record homeownership rate of nearly 70 percent, but some homeowners now face problems making their mortgage payments which can lead to foreclosure according to www.realtor.org. To best understand what foreclosure is all about, it’s important to have the fundamentals all spelled out. Here’s an acronym that highlights key points.

F is for finances. Foreclosure is often the result of bad financial situations. Some borrowed too much, got variable interest rates they couldn’t handle, or had a job loss that hindered making mortgage payments.

O is for outside help. Homeowners shouldn’t have to face foreclosure alone. Seek outside help to prevent foreclosure by talking to your lender and discussing government approved programs.

R is for refinancing. Some homeowners have the option to refinance their current loan to create more manageable monthly payments.

E is for educate. The more homeowners educate themselves in foreclosure prevention options, the more likely they are to combat the problem.

C is for counselors. Foreclosure counselors are a great resource for homeowners, because they can help review finances, establish a budget, and speak on your behalf to the lender.

L is for loan modification. Loan modifications take time, but can knock off a huge chunk of your monthly payment costs.

O is for observe. Be observant of your finances and spending habits. If you know in advance you may have issues making your mortgage payments, you may be able to stop the foreclosure process.

S is for short sale. A short sale is an alternative that cost lenders less and affects homeowner credit scores less than foreclosure.

U is for underwater. The term “underwater in your mortgage” means owing more than what your house is worth.

R is for right now. Homeowners shouldn’t sit on their hands and ignore unpaid mortgage bills and calls from debt collectors. Right now is the best time to take action to prevent foreclosure.

E is for excessive. If you’re facing foreclosure beware of counseling programs that charge excessive fees and makes sure to cut back on excessive spending. Saving every dime with buy you more time!

 

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This is filed under Foreclosures.


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