Hawaii Foreclosure Info Center

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If you are having problem making your payments, call your loan servicer to discuss your options as early as you can. The longer you wait to call, the fewer options you will have.


Many loan servicers are expanding the options offered to debtors - it deserves calling your servicer even if your request has been rejected in the past. Servicers are getting great deals of calls: Be client, and be consistent if you don't reach your servicer on the very first shot.


- You may qualify for a loan modification under the Making Home Affordable Modification Program (HAMP) if:
- your home is your primary house;
- you owe less than $729,750 on your first mortgage;
- you got your mortgage before January 1, 2009;
- your payment on your first mortgage (including principal, interest, taxes, insurance and property owner's association dues, if appropriate) is more than 31 percent of your existing gross earnings; and
- you can't afford your mortgage payment due to the fact that of a financial difficulty, like a task loss or medical costs.


If you fulfill these certifications, call your servicer. You will need to supply paperwork that might include:


- info about the month-to-month gross (before tax) income of your home, including recent pay stubs.
- your most current tax return.
- info about your cost savings and other assets.
- your month-to-month mortgage statement.
- info about any second or home equity line of credit on your home.
- account balances and minimum month-to-month payments due on your credit cards.
- account balances and month-to-month payments on your other financial obligations, like student loans or automobile loans.


If you're interested in re-financing to make the most of lower mortgage rates, however are afraid you won't qualify due to the fact that your home value has decreased, you may want to ask if you certify for the Home Affordable Refinance Program (HARP) or the HOPE for Homeowners (H4H) program. To learn more, see www.hud.gov/foreclosure.


Avoiding Default and Foreclosure


If you have fallen back on your payments, think about discussing the following foreclosure prevention choices with your loan servicer:
Reinstatement: You pay the loan servicer the whole past-due amount, plus any late charges or charges, by a date you both consent to. This choice may be suitable if your problem paying your mortgage is short-term.


Repayment plan: Your servicer provides you a repaired amount of time to repay the quantity you are behind by adding a portion of what is past due to your routine payment. This alternative might be appropriate if you have actually missed a small number of payments.


Forbearance: Your mortgage payments are reduced or suspended for a duration you and your servicer concur to. At the end of that time, you resume making your regular payments along with a swelling amount payment or extra deposits for a number of months to bring the loan existing. Forbearance might be an option if your income is reduced momentarily (for example, you are on impairment leave from a task, and you expect to go back to your complete time position soon). Forbearance isn't going to assist you if you remain in a home you can't manage.


Loan modification: You and your loan servicer agree to completely change one or more of the regards to the mortgage agreement to make your payments more workable for you. Modifications might include decreasing the rate of interest, extending the regard to the loan, or including missed payments to the loan balance. A modification likewise might include lowering the quantity of cash you owe on your main home by forgiving, or cancelling, a portion of the mortgage debt. Under the Mortgage Forgiveness Debt Relief Act of 2007, the forgiven financial obligation may be omitted from earnings when determining the federal taxes you owe, however it still needs to be reported on your federal tax return. For more details, see www.irs.gov. A loan modification may be required if you are dealing with a long-lasting decrease in your income or increased payments on an ARM.


Before you request forbearance or a loan adjustment, be prepared to reveal that you are making a good-faith effort to pay your mortgage. For example, if you can reveal that you have actually reduced other expenditures, your loan servicer may be most likely to work out with you.


Selling your home: Depending upon the present market conditions, selling your home might offer the funds you require to pay off your current mortgage debt completely.


Bankruptcy: Personal personal bankruptcy typically is thought about the debt management option of last hope due to the fact that the results are long-lasting and far-reaching. A personal bankruptcy remains on your credit report for 10 years, and can make it difficult to get credit, purchase another home, get life insurance, or often, get a job. Still, it is a legal treatment that can use a clean slate for individuals who can't satisfy their financial obligations.
If you and your loan servicer can not settle on a repayment plan or other treatment, you may desire to examine filing Chapter 13 bankruptcy. If you have a routine income, Chapter 13 may permit you to keep residential or commercial property, like a mortgaged home or car, that you may otherwise lose. In Chapter 13, the court authorizes a repayment plan that allows you to utilize your future earnings toward payment of your debts during a three-to-five-year duration, rather than surrender the residential or commercial property. After you have actually made all the payments under the strategy, you receive a discharge of specific financial obligations.


To read more about Chapter 13, see www.usdoj.gov/ust; it's the website of the U.S. Trustee Program, the company within the U.S. Department of Justice that oversees insolvency cases and trustees.


If you have a mortgage through the Federal Housing Administration (FHA) or Veterans Administration (VA), you may have other foreclosure alternatives. Contact the FHA (www.fha.gov) or VA (www.homeloans.va.gov) to talk about them.


Contacting Your Loan Servicer


Before you have any discussion with your loan servicer, prepare, tape your income and costs, and determine the equity in your home. To calculate the equity, estimate the marketplace worth less the balance of your very first and any second mortgage or home equity loan.


Then, write down the answers to the following concerns:


- What occurred to make you miss your mortgage payment(s)? Do you have any documents to support your description for falling back? How have you tried to fix the issue?
- Is your issue temporary, long-lasting, or long-term? What changes in your scenario do you see in the brief term, and in the long term? What other financial concerns may be stopping you from getting back on track with your mortgage?
- What would you like to see occur? Do you wish to keep the home? What kind of payment plan would be possible for you?


Throughout the foreclosure prevention process:


- Keep notes of all your communications with the servicer, consisting of date and time of contact, the nature of the contact (face-to-face, by phone, email, fax or postal mail), the name of the representative, and the outcome.
- Follow up any oral requests you make with a letter to the servicer. Send your letter by qualified mail, "return receipt requested," so you can record what the servicer got. Keep copies of your letter and any enclosures.
- Meet all due dates the servicer provides you.
- Remain in your home throughout the process, considering that you might not receive certain types of support if you vacate. Renting your home will alter it from a primary residence to an investment residential or commercial property. More than likely, it will disqualify you for any extra "workout" help from the servicer. If you pick this path, make certain the rental income is enough to help you get and keep your loan present.


Housing and Credit Counseling


You don't need to go through the foreclosure avoidance process alone. A counselor with a housing therapy firm can assess your scenario, answer your concerns, review your choices, prioritize your financial obligations, and help you prepare for conversations with your loan servicer.


Consider Quiting Your Home Without Foreclosure


Not every situation can be resolved through your loan servicer's foreclosure avoidance programs. If you're unable to keep your home, or if you do not want to keep it, consider:


Selling Your House: Your servicers may postpone foreclosure proceedings if you have a pending sales agreement or if you put your home on the market. This technique works if proceeds from the sale can settle the whole loan balance plus the costs connected to selling the home (for instance, property agent charges). Such a sale would permit you to prevent late and legal costs and damage to your credit rating, and secure your equity in the residential or commercial property.


Short Sale: Your servicers may enable you to offer the home yourself before it forecloses on the residential or commercial property, consenting to forgive any shortage in between the sale cost and the mortgage balance. This technique avoids a harmful foreclosure entry on your credit report. Under the Mortgage Forgiveness Debt Relief Act of 2007, the forgiven debt on your primary residence may be excluded from income when calculating the federal taxes you owe, however it still needs to be reported on your federal tax return. To learn more, see www.irs.gov, and consider speaking with a monetary advisor, accounting professional, or attorney.


Deed in Lieu of Foreclosure: You voluntarily transfer your residential or commercial property title to the servicers (with the servicer's arrangement) in exchange for cancellation of the rest of your financial obligation. Though you lose the home, a deed in lieu of foreclosure can be less damaging to your credit than a foreclosure. You will lose any equity in the residential or commercial property, although under the Mortgage Forgiveness Debt Relief Act of 2007, the forgiven financial obligation on your main house may be omitted from income when determining the federal taxes you owe. However, it still needs to be reported on your federal tax return. For more details, see www.irs.gov. A deed in lieu of foreclosure might not be an option for you if other loans or obligations are secured by your home.


Look Out to Scams


Scammer follow the headings, and understand there are homeowners falling behind in their mortgage payments or at danger for foreclosure. Their pitches may sound like a method for you to extricate, but their intents are as far from honorable as they can be. They mean to take your cash. Among the predatory frauds that have been reported are:


The foreclosure prevention professional: The "specialist" really is a bogus therapist who charges high fees in exchange for making a few phone calls or completing some documentation that a property owner could easily do for himself. None of the actions results in saving the home. This fraud provides house owners an incorrect sense of hope, postpones them from seeking certified aid, and exposes their individual monetary info to a fraudster.Some of these business even utilize names with the word HOPE or HOPE NOW in them to puzzle customers who are trying to find support from the complimentary 888-995-HOPE hotline.
The lease/buy back: Homeowners are deceived into finalizing over the deed to their home to a scammer who tells them they will have the ability to remain in your home as a tenant and eventually buy it back. Usually, the terms of this scheme are so requiring that the buy-back ends up being difficult, the property owner gets kicked out, and the "rescuer" strolls off with the majority of or all of the equity.
The bait-and-switch: Homeowners think they are signing files to bring the mortgage existing. Instead, they are transferring the deed to their home. Homeowners normally don't know they've been scammed till they get an expulsion notification.