Using The "home Affordable Mortgage Program" To Prevent Foreclosure Vs. Avoiding Sheriff''s Sale On

By Author: Nick Adama
Total Articles: 197
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Because of the foreclosure epidemic that has completely devastated our financial system, several local and federal government programs were developed to help provide relief to consumers. Most of these programs have since come and gone, but there are still a few hanging around. One many people thing of is what many call "The Obama Plan" or the "Home Affordable Mortgage Plan". This was a government plan that was created to be able to help foreclosure victims across the nation. It was created so the bankers would help the property owners to modify their loan, even if their loan became higher than the value of their property.

Typically when being asked to re-write a loan, a mortgage servicer will usually deny applications when the property's value has fallen below the loan amount. This is an important factor that the government was able to impact. It was an important change, because property values have decreased across the country.

So, if rejected once when trying to obtain refinancing from a traditional mortgage company in the past, you may not be rejected for a new loan modification. The Home Affordable ...
... Modification Program makes provision to the services that they would get paid. But banks were never actually required to take part. Some half a million mortgages were submitted for consideration, but reports show the number of accepted cases are as low as 2000. Only 0.4% approvals of the total 500,000 submissions is pretty discouraging if those numbers are accurate.

In order to qualify for The Home Affordable Modification Program, your original loan must have originated on or before January 1st, 2009. Two recent pay stubs and the most recent tax return are necessary and you must sign an affidavit of financial hardship.

Besides the loan modification, accessible until December 2012 unless changes to the current program are made, there is a refinance program that ends in June 2010. There are other choices for you that can help you avoid a Sheriff's sale as well.

The alternative to seeking a government program is to work with a private company that has experience representing homeowners with banks. The Home Affordable Modification Program was based on an already working process that mortgage professionals were using on a daily basis. Loan modifications were in existence and have been helping homeowners for many decades. For companies with experience representing homeowners with mortgage professionals, obtaining a loan modification was very typical. This experience was completely absent from the governments plan to prevent the Sheriff's sales. Instead, they made their program voluntary and left it up to the banks to work with the homeowners.

Plainly a bad idea from the start, since banks are notoriously bad at working out a solution with the consumer. The financial crunch has reached the lenders and servicers, too; so the employee with the least experience end up being the first (and mostly final) line of support for the foreclosure victim. The system was not good from the beginning, so such few successes is understandable.

If you are facing a Sheriff's sale, we strongly advice to choose to negotiate with your bank on your own to save your home, rather than relying on the government to save your property. We still advise you to apply for The Home Affordable Mortgage Program, but just make sure you don't count on actually getting it approved. You absolutely need Plan B and may be Plan C; and it may just make the difference for you if you find a professional to help explore all possible options.
Nick publishes information for the My Personal Bankruptcy Lawyer website, which aims to educate borrowers how filing for bankruptcy really works. The site examines the different forms of bankruptcy, how to avoid filing, and the best resources borrowers can utilize if it becomes necessary. Visit the site today to find out more about financial setbacks, foreclosure, debt settlement, and more: http://www.mypersonalbankruptcylawyer.com/