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Ways to avoid foreclosure in 2016

If you want to avoid foreclosure, there are steps you can take to do so, many of which your attorney will be familiar with. The Obama Administration has created a number of programs designed to help homeowners avoid foreclosure and to help them make their monthly mortgage payments when they are struggling. These programs are primarily administered by the U.S. Treasury Department and the U.S. Department of Housing and Urban Development.

Making Home Affordable is probably one of the most recognizable programs available today. This program aims to help homeowners avoid foreclosure and to help stabilize the country's housing market, which was impacted severely during the recession. By helping keep people in their homes, the administration hopes to improve the national economy.

The program helps individuals lower their monthly payments by getting them more stable loans at lower interest rates. For those who no longer want to own a home or who don't think they can continue to afford one, the program also offers helpful ways out of the home without going into foreclosure, helping individuals protect their credit ratings and reputation. Even if you owe more than your home is worth, there are options for you through these programs.

One that is ideal to lower or modify your loan is the Home Affordable Modification Program, which lowers you payments each month to 31 percent of your verified monthly pre-tax income. This makes your payments more affordable. Another, which is for "underwater" mortgages, is the Principal Reduction Alternative, which encourages investors and servicers to reduce the amount you owe on the home overall.

These are just a few of the potential ways to avoid foreclosure; make sure you look into all the ways before you make a life-changing decision.

Source: U.S. Department of Housing and Urban Development, "Avoiding Foreclosure," accessed July 07, 2016

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