Mortgage Foreclosure Prevention Programs From Top Mortgage Lenders–Can Troubled Homeowners Avoid Foreclosure?

Foreclosure prevention programs are available to homeowners from many of the nation’s top mortgage lenders, like Citigroup, Bank of America, J.P. Morgan Chase, and Wells Fargo, and can be beneficial in helping troubled homeowners avoid foreclosure. Some homeowners have been suffering from a variety of mortgage ailments and, as a result, can simply no longer afford their home. Others have been dealing with troubles like an underwater mortgage and have been seeking ways in which they can dig themselves out of a bad situation.

Certain programs have been enacted to help homeowners in these instances avoid foreclosure or deal with their mortgage trouble. Homeowners may be unable to benefit from traditional modifications or alternative Making Home Affordable Programs, so plans like the deed in lieu of foreclosure program and short sales have been provided to homeowners who are in need.

Homeowners who simply can no longer afford to make their mortgage payment have been getting assistance in the deed in lieu of foreclosure program. This plan allows homeowners to surrender the deed to their home, and in some cases be allowed to remain in their home for a set period of time. However, the main goal of this plan is to allow homeowners who can no longer afford their home avoid the foreclosure process so that their credit score will take less of a hit and homeowners can simply avoid having the stamp of foreclosure on their credit history.

For underwater homeowners, many have either gotten to the point where they can no longer afford their mortgage payment or simply walk away to get out of their underwater situation. Short sales have been offered to many homeowners in this case, as lenders have been willing to work with homeowners who are facing an underwater home. Many underwater homeowners have simply defaulted and walked away from their mortgage, which is obviously detrimental to their credit score and difficult for lenders.  For this reason, short sales are often seen as the alternative to homeowners simply walking away.

Yet, mortgage lenders differ on how they proceed in these situations, so it will be at the discretion of a homeowner’s mortgage servicer as to how, or if, these programs will be implemented for their personal situation.