Today I am going to discuss Auburn, WA foreclosure help and real estate solutions, why you need it, and where to look for it.

When a person living in Auburn, WA knows that he/she is going to miss a payment, or has already missed one or more payments, time is of the essence, you may be heading toward foreclosure. Because the government is constantly trying to help solve the mess that we are currently experiencing, they have recently come out with yet another “bailout” program that has the unusual twist of assisting some individual homeowners facing a foreclosure in Auburn, WA. In brief, the “distressed” homeowners who have little to zero equity remaining in their home and who meet certain eligible criteria can obtain a quick and streamlined loan modification. This is a process whereby the mortgage payment is reduced to an affordable monthly payment on a 3 month trial basis to see if the borrower can maintain the new monthly payment in an effort to keep them out of foreclosure in Auburn, WA. This will apply to and help some homeowners, but of course not all homeowners.

When facing a potential foreclosure in Auburn, WA , here are some things to keep in mind from the start:

Don’t panic. It is human nature to panic and then not know which way to turn, wishing that it were not really happening to you.

Don’t delay. Delaying will only make your foreclosure matters worse. Loss of income, health care issues, economic downturn, and an adjustable loan monthly mortgage payment (now increasing) are factors outside a person’s control. Accepting the facts, and trying to find the solution that will work for you is something that must be tackled head-on. Do not ignore warning letters from your lender.

Beware of scams. Never make your mortgage payments to anyone other than your lender. Beware of any home-sale contracts in which you are not formally released from liability for your mortgage loan. If it sounds too good to be true, it probably is. These scams will not help your Auburn, WA foreclosure situation.

Talk to a lawyer. There may be some legal steps that a lawyer can take to help postpone the foreclosure, such as bankruptcy, chapter 7, 11, or 13. The sooner that you find out what your options are, the better you can proceed with planning the action to take. A lawyer will know the best way for you to proceed and offer choices. Never sign a contract under pressure without talking to a lawyer.

Talk to a qualified Real Estate agent. Real estate agents such as myself, know the current value of your home in Auburn, WA, and how long it will take to sell. If it needs to be sold quickly, a sale may not happen in time, so consulting a real estate agent as soon as you know you are facing problems, preferably long before any foreclosure notices are ever served, gives an agent time to market the home, obtain a buyer for your Auburn, WA home, and get it closed. Agents (or their short-sale specialists they use) oftentimes will have to negotiate a long time with a lender to make it work. A lender is not in a hurry to make a deal where the lender going to lose a lot of money. Recently, some lenders have speeded up the process, but the agent must be experienced and persistent in working with foreclosures.

Educate yourself and know your rights. Buy the book, “Fight Foreclosure! How to Cope with a Mortgage You Can’t Pay, Negotiate with your bank, and Save your Home” (Wiley, $19.95) by David M. Petrovich, a former real estate agent who has spent 25 years working with troubled homeowners facing foreclosure. Ten years ago he co-founded the New Jersey-based consumer advocacy nonprofit Society for the Preservation of Continued Homeownership. Petrovich dispenses solid advice such as: Be honest with yourself and your lender. Don’t make promises you can’t keep. Act fast. Explore all options. Document and file everything. Don’t sign anything you don’t fully understand. Avoid the many foreclosure rescue scams that prey on homeowners in trouble. Only do business with those you can trust. Communication with the lender is crucial, as well as outlining strong and convincing ways of persuading a lender to modify the loan terms. However, Petrovich says, “By agreeing to a mortgage modification to save your home from foreclosure, you may feel as if you’ve dodged a bullet. You may have, BUT if your loan was made in bad faith, had predatory characteristics (for instance, a loan the originator knew you could not afford, told you one thing but delivered something else at closing, charged excessive fees, etc.), or if your loan is one of millions of mortgage loans made in violation to federal Truth in Lending Law, you may have shortchanged yourself.” Other signs of predatory lending include abusive prepayment penalties, kickbacks to brokers (Yield Spread Premiums), and loan flipping.

Knowledge is power. In closing, once you sign a modification agreement to save your home from foreclosure in Auburn, WA, you waive your legal right to revisit the issue later. Consequently, before signing anything it might behoove you to have a lawyer look over your original loan documents as well as the proposed loan modification and workout papers. Not just any old lawyer, though, but one skilled in forensic loan audits, truth-in-lending violations, and foreclosure defense. Also, a trusted and knowledgeable Loan Officer may be able to spot some of the violations and/or excessive financing fees that the original mortgage broker charged. Discovering that the original loan has these kind of issues can help to persuade the lender to be more cooperative by creating incentive for the lender to grant a more beneficial loan modification.

For those worried about foreclosures, time is your enemy.  Many borrowers are facing foreclosures because their “interest only” or “variable rate” loan interest terms have caused their monthly mortgage payment to skyrocket beyond what they could afford.  For those in Auburn facing foreclosure because of your loan problems, you are not alone. According to the New York Times, about 1 in 11 mortgage holders face loan problems, which often lead to a foreclosed home. Loan modification allows homeowners and lenders to change the terms of a loan in order to stop foreclosures.  A loan modification is NOT a new loan.  It is often the ONLY option for some homeowners with bad credit that are behind on their mortgage who are striving to avoid foreclosure.

Here is how it works:  The owner of the home contacts their lender and lets the lender know that they are having trouble with the current mortgage payment.  Often the lender will want evidence of their income and reasons why they are having trouble with their home mortgage.  It is a renegotiation process, and loan restructuring of an existing mortgage note.  There should be no loan fees involved, since it is not a refinance nor is it a new loan. A loan modification can be done in several ways or a combination of ways such as:

• The loan’s interest rate may be reduced.
• The interest rate could be changed from an adjustable to a fixed rate.
• The period of time the borrower has to pay the loan back can be lengthened.
• The type of loan could be changed altogether.

If you are a homeowner in Auburn facing a foreclosure, remember it is always homeowner’s best interest to avoid foreclosure and try to keep their home, and it is also in the lender’s best interest to help the homeowner as well.  Lenders do not prefer to take a foreclosed home since it is a hassle for them and also a money-losing situation most of the time.  This loan modification process is a solution that turns a bad situation into a win-win situation for both parties.