Foreclosure help Fannie Mae style

Written by: George Haughton

Foreclosure help will come from unlikely source, Fannie Mae. In fact Fannie Mae now joins Freddie Mac in offering a deed for lease program. Therefore, those facing foreclosure have the option to rent their homes back for a period of time until they get their finances in order. This deed for lease allows the homeowner who failed to qualify for or cannot maintain a loan modification to transfer their deed or their interest in the home to Fannie Mae.

This process is really a deed in lieu of foreclosure,it does not show up on your credit report has a foreclosure. Foreclosure on your credit record prevents you from purchasing another house for at least three years with FHA and five years for conventional loans. Therefore, this program allows a homeowner to pay rent equal to the documented 31% of their monthly income pretax or gross income.

That is welcomed news for the close to one million homeowners who were served foreclosure notices last month. The estimate is that over 18.8 million houses stand empty in the third quarter, which has created a value and vandalism problem.

Therefore, we can say finally the lenders are really looking at the bigger picture. For example in Detroit that city has started to knock down empty blocks of houses and do not have any plans to replace these houses any time soon. Therefore, it makes total business sense to keep the homeowners in these homes and work it out.

This deed for lease does come with out some qualifying guidelines so you might want to look these up before you assume you qualify. For example it must be your primary home you live in. Fannie Mae or Freddie Mac don’t actually make loans to consumers so this foreclosure help is a quick measure to legally keeping homeowners in place, but again what are the guidelines and how long is this period.

Based on what I have read the guaranteed lease period is for one year and month to month after that. This action will ease the minds of many homeowners fighting foreclosure and help keep the neighborhood more stabilize. The truth a lot of these homes have become very hazardous and dangerous. In the state of California some communities speak about pools that are a breading ground for mosquitoes.

Freddie Mac unlike Fannie Mae rental lease is for a month to month.Therefore, what Fannie Mae has done is taken the big uncertainty out of the minds of the homeowners for at least a year. Some are now asking the question is a postponement of the inevitable?

Well the economy is said to be improving. However, some experts who follow the housing issue think the second wave of foreclosures is still in front of us. Therefore, creating an option like “deed for lease” might be an attempt to cushion the blow. This foreclosure help by deed for lease really is the answer for those facing foreclosures now and yet to come?

What is a foreclosure?

Why did the sheriff put my stuff on the street? That question is hard to answer if you don't understand your state foreclosure proceeding. Therefore, lets look at what foreclosure is and why you and your family could be on the street. Also once you understand the why then we will look at what can be done to prevent it. However, lets start with the basic question what is a foreclosure?

Foreclosure is the big remedy that a mortgage holder has against the debtor property owners. Foreclosure is then a legal means by which the bank can acquire your property by that the real estate conveyed in the mortgage be sold and the sale proceeds used to pay the debt.

Grounds for foreclosure:
A holder of a mortgage does not have rights to foreclosure or exercise other remedies unless the homeowner is in default under the mortgage. In addition to failure to pay debt, most mortgage note contains other provision, the violation of which result in default. These provision include failure to pay property taxes,failure to pay the home owners insurance and keep the property in good condition. Breach of any of the mortgages covenant gives the holder of the mortgage the right to foreclose or exercise remedies.

Types of Foreclosures

Foreclosures take place either judicially or through a power of sale contained in the mortgage. Based on which state your property is located will determine which type of foreclosure will the bank use. However, if your state use mortgages then look the lender to follow the judicial sale procedure. On the other hand states that use deeds or security deeds to secure a debt will use the power of sale foreclosure.

Now that we got the generally idea regarding the different ways a bank can foreclose and take place, lets look at both procedure a little closer and what could take place. I must warn you upfront I am not an attorney and nothing should be taken as substitute for contacting an attorney. If you have legal questions regarding your foreclosure procedure please contact one today. Now that I have got that out lets move on.

A judicial foreclosure is a lawsuit. The mortgage holder will file a complaint against alleging there is a debt owed: the debt is in default :and the debt is secured by real property given in a mortgage. The creditor will then ask the court to grant relief by ordering the real property sold to pay the debt. Now what? Well the you the homeowner is given an opportunity to answer and a hearing on the merit is held on the merits to decided if the foreclosure should occur. So many homeowners is unable to put together a legal response to this challenge and just move out to avoid embarrassment.

Source: Daniel f. Hinkel

Foreclosure process

Fighting foreclosure in the last two years is the number one issue for many homeowners. Homeowners are losing their homes in record numbers. Therefore, how can homeowners survive foreclosure? What are the foreclosure time line and the reasons for foreclosure?

Foreclosure is a legal solution to a contract breach by the homeowner. To cure the problem both parties (bank and the homeowner) must decided upon a solution. If there is no agreement reached between the homeowner and their lender then the lender is forced to act on their own with foreclosure being the end result.

There are regulations in place in each state to protect the homeowner by requiring your lender to prove that they have tried to work with you the homeowner. This can come in the form of loan programs such as a r loan modification and forbearance. Disclosures in the form of written notices will be mailed to you the homeowner regarding a possible foreclosure. .

I many cases your lender will use a loan servicer to to process the foreclosure. This could be a benefit as well a problem. The servicer really could stand in the way of the homeowner getting the best deal from their lender. So if you find yourself in this position you must be careful when negotiating with your Loan Servicer. The servicers are the ones who move the file to the attorney. Recently home owners have challenged these law suit under the legal question, has to whom really own their mortgages. What the courts have found is that the lender could be on the mortgage note but it is servicer who brings the law suit against them. In fact in many situations who owns the mortgage is very difficult to establish.

Words of the day:
HARP
HAMP
Home affordable mortgage modification programe
Freddie Mac foreclosure
Fannie Mae foreclosure