Options

For those borrowers that are unable to afford their mortgage payment. Listed below are the options you will need to consider in the following order...

1.) HARP (Home Affordable Refinance Program). Allows you to convert to a low 30Y Fixed. You must have a Fannie or Freddie loan with good credit and be current on your payments. You can view the qualifications by clicking on the Program Tab

2.) HAMP (Home Affordable Modification Program). This is where most of the borrowers will be in; however not everyone will qualify. You will need to have a financial hardship and there are front end and back end calculations that need to be met. You can view the qualifications by clicking on the Program Tab.

3.) HAFA (Home Affordable Foreclosure Assistance) If you were denied a loan modification and unable to afford your mortgage payments, then you may want to consider selling your property at a loss. Your lender would first need to agree to the short sale and the credit impact will be two years and is less damaging then a foreclosure. You can view the qualifications by clicking on the Program Tab.

4.) Deed of Lieu. This is where you give back the deed to the lender, usually this happens if the short sale is unsuccessful and this also prevents a foreclosure on your record.

5.) Foreclosure. People with excellent credit are now foreclosing on their properties by walking away from it. They believe the property will not go up in value and have suffered a substantial loss from it. Consequences apply as this will stay on your credit report for 7 years.

6.) Bankruptcy. Regardless if it's a Chapter 7 or 13, it will stay on your credit report for 10 years. With the new Bankruptcy ACT of 2005 it is now more difficult to file for Chapter 7 and most likely you will need to file a 13, which still requires you to pay back your debts.