Although foreclosures in Buffalo NY have fallen from highs recorded during the 2004-2008 period (according to the Mayor’s Office of Strategic Planning), Buffalo residents who fall behind on mortgage payments risk having their homes foreclosed. Luckily, it is possible to prevent a lender from foreclosing on your property as you resolve issues such as clearing outstanding payments. Here is how to avoid foreclosure in Buffalo, NY
A good starting point for property owners facing foreclosure is lowering monthly payments via mortgage refinancing. According to the US Department of Housing and Urban Development, doing so could help you lower monthly mortgage payments by up to 1,000 or more. Moreover, HUD data shows that property owners who refinance via the Home Affordable Modification Program (HAMP) reduce their monthly mortgage payments by up to 40. Other mortgage refinancing or modification options include Home Affordable Refinance Program (HARP), Second Lien Modification Program (2MP), and Principal Reduction Alternative (PRA).
Communicate with Your Lender
Most lenders have options or ways of helping homeowners with mortgages get through tough financial times. With this in mind, contact your lender and explain the financial difficulties you are facing if you are likely to default on mortgage payments. This approach is better than waiting until your lender initiates foreclosure process to talk about your dire financial situation.
Contact a Housing Counselor
Thanks to the HUD, you can access free foreclosure counselling services in Buffalo, NY. After contacting a housing counselor, heshe will evaluate your finances, offer advice on viable options from a legal standpoint, and guide you through mortgage refinancing or modification if doing so would help you retain your home and keep up with monthly payments. To access foreclosure avoidance counselling services, contact your local Office of Housing Counselling. Alternatively, visit the HUD’s website and search the Foreclosure Avoidance Counselors list for one near your home or neighborhood.
Unemployed Homeowner Assistance
Another foreclosure avoidance option that you could consider is enrolling in programs that assist unemployed homeowners get through rough financial patches. A good example is the Home Affordable Unemployment Program (UP) that enables homeowners to suspend mortgage payments for at least 12 months as they tidy up their finances and seek re-employment. You may also be eligible for the FHA’s Special Forbearance that comes with an extended forbearance period of 12 months.
Chapter 13 Bankruptcy
If you have fallen behind on multiple debts including mortgage payments, consider filing Chapter 13 bankruptcy. While bankruptcy will have a negative impact on your credit score, it will give you much needed breathing space to reorganize personal finances. In addition, Chapter 13 bankruptcy will allow you to keep your home, eliminate or reduce drastically other types of debts, and give you up to five years to catch up with tax payments. In spite of these benefits, you should only consider Chapter 13 bankruptcy if all other options fail.
Inability to keep up with mortgage payments does not mean your lender will automatically initiate foreclosure. You can prevent such an outcome by refinancing your mortgage, informing your lender about the financial difficulties you are facing, seeking unemployed homeowner assistance, contacting a housing counselor, or filing for Chapter 13 bankruptcy.