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Government Foreclosure Prevention Program Two Things You Need to Know

Federal Government Foreclosure Prevention Program Goes Into Affect Today

The Two Most Important Things You Need to Know

  1. Find out if you qualify from YOUR LENDER. You are not going to find out from anyone else. Not all lenders are participating in the program, so find out if your lender is or will participate. The program is in affect so you can call them starting now.
  2. KNOW EXACTLY what you are getting yourself into. Know the terms and the duration and especially the restrictions and limitations.

Starting today, if you are in trouble with your mortgage, you can call your lender to see if you qualify for assistance under the federal government foreclosure prevention program.

We really recommend that you make that call rather than try to wade through all the restrictions, limitation and qualifications because unless your lender is Freddie Mac or Fannie Mae, your lender may or may not be participating. If you are under a Freddie Mac or Fannie Mae loan, it should be easier and they are definitely participating in the program.

So, the program is beginning today, and you need help. What do you need to know?

  1. Gather all your mortgage documents and the closing package for your home. It must be your primary residence. There will be no help for investment or speculative properties.
  2. Gather all you current information such as bank statements, tax returns, paycheck stubs and so on.
  3. Understand exactly what you are getting into.

Number 3 above is the most important advice that you can follow. You can be sure that there will be catches to the modified loans such as; extended payment periods of up to 40 years, rising interest rates after 5 years, limitations on profits when the home is sold, and so on. If you don’t understand, make them explain, or hire an attorney to review the package.

From Bad to Worse

My concern is that some people will go from bad to worse in 5 years or so and may be shackled to their home by these new packages. So again, know exactly what you are getting into.

I want to qualify these cautions and make it clear that I support mortgage mitigation and foreclosure prevention when it works for both parties in the long term. Markets like the Daytona Beach real estate market are saturated with foreclosures and short sales. As of this morning, we have a 22 month supply of homes and condos on the market. Prices are unlikely to reach bottom until inventory goes down.

So if you believe you could benefit from this plan, call your lender and start the process. If more people can stay in their homes and prevent foreclosure, it will help us all.

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