Equity Loans To Stop Foreclosure - FHA Foreclosure Assistance


Refinancing your home loan can offer you some relief from impending foreclosure, however, not everyone is able to apply for foreclosure loans. Contacting your local FHA office can guide you to the best options for your defaulted mortgage.

Foreclosure is a legal procedure by which the lender manages to dispose the property of the borrower who has defaulted in paying back the loan within the time due to him. The foreclosure forces the house into being mortgaged off. This can be avoided by means of a foreclosure loan.

A foreclosure loan is taken against an ongoing foreclosure deal by which the borrower can pay back the loan to the lenders. Many scrutinizing processes are involved before the borrower gets the loan sanctioned. There are few lenders who will offer money regardless of previous mortgage loan history.

They generally look out for the credit, income and loan to value before actually considering the offer. Companies offer minimum guidelines for foreclosure loans when compared to individual lenders. There are also banks which offer such loans.

These programs are instituted through funds from companies which are ready to work directly with the individual. They pay the old loans in order to give a new loan. This actually stretches the loan over a longer term, but with additional interest. These loans can be obtained by contacting banks, loan institutions, Chamber of commerce etc. Though these loans are not offered to everyone, it is better to try.

Refinance through the FHA

Federal Housing Administration or the FHA offers a FHA Refinance by which the foreclosure loans are refinanced. The lender must be associated with the FHA directly in order to avail this benefit for the borrower. The borrower can directly contact these lenders and start of a loan to pay the previous one.

The credit, income, expenditure and assets are evaluated and the loan is sanctioned. The lender signs the deal through the FHA. The borrower will have to pay off the loan directly to the FHA after the due date. The FHA will pay the loan amount directly to the lender.

The FHA refinancing assists in cases where the market has become much better than what it was previously. The loan sanctioned will be used for paying off the loan and the equity present at the home can be used to pay off this loan as well.

Loans to Avoid Foreclosure

Similarly banks also offer loans to avoid foreclosure. The demands are similar to that of the FHA. At times the federal government can back these borrowers thereby helping them out by means of banks. These banks offer loans based on the credit and income. The government in turn sanctions these, in case of a problem.

The refinancing is done by means of equity present in the home. The equities could be paid off to get a waiver on the pending loan. The lender would usually refinance the existing loan. The other fees due to him would be included in the new loan. At times the home could be listed with a realtor as they can fetch a higher level of profit.

A short sale can be done in case the amount to be repaid is not much compared to the worth of the home. By this method the house is sold off for a short period of time, and is again bought once the cash for reimbursing the loan is obtained.