Defaulting On A Home Loan And Mortgage Assistance For Lower Payments–Troubles Homeowners Still Face And Alternative Options

Defaulting on a home loan can be quite detrimental to a homeowner’s credit score and financial life, but there are some homeowners who have grown frustrated when seeking mortgage assistance for lower payments on their mortgage. However, the troubles that homeowners still face can be combated through alternative options available to those who are looking for a home loan modification but may be considering simply walking away from their home due to their financial position.

Obviously, homeowners have grown frustrated over the past months for a variety of reasons and many have considered walking away from their mortgage as a result, but homeowners do still have opportunities for foreclosure prevention and more affordability on their monthly mortgage payment. Many homeowners feel that due to what many are deeming to be a lackluster performance from the Making Home Affordable Program, home loan modifications are no guarantee when it comes to finding lower payments on a home loan, but there have been homeowners who are seeing permanent home loan modification assistance from both federal and private modification plans.

Homeowners who are in an underwater mortgage situation, who are unemployed, or who are simply facing financial difficulties and fear that defaulting or missing payments on their home loan is inevitable not only have these modification plans from in-house programs and the Making Home Affordable Program, but there are also extensions programs like the Unemployment Program which can offer a forbearance for a homeowner who has lost their job and cannot make their monthly mortgage payment. This forbearance option for unemployed homeowners through the Making Home Affordable Program allows a minimum of three months during which a homeowner will either see a lower mortgage payment or can forgo their home loan payment altogether.

Sadly, there are still homeowners who have seen foreclosure after receiving a home loan modification and servicers report that there are homeowners who continue to miss payments despite efforts to lower their interest rate, extend their mortgage terms, and generally provide a lower monthly mortgage payment through these modification plans. Yet, short sale opportunities and deed in lieu of foreclosure plans do still offer homeowners who face inevitable foreclosure the option to escape the foreclosure process through either selling their home at a loss within an approved program or surrendering their deed.

While homeowners would rather avoid the loss of their home, obviously, there are opportunities for homeowners to gain the affordability they need to hopefully prevent foreclosure but also in cases where a homeowner’s financial situation is too dire for one of these plans to help, foreclosure alternatives are available as well so that homeowners who consider walking away can avoid doing so as this will cause damage to their credit, may cause difficulty for those who are seeking employment, and can make acquiring a home in the future harder once a homeowner has gotten back on their feet financially.