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Your Get Out of Jail Free Card for Real Estate
If you miss a mortgage payment, the lender has a right to foreclose — to sell your property and recover the loan amount plus foreclosure costs. However, lenders sometimes prefer to work out matters so that foreclosures can be avoided because a typical foreclosure action results in a $40,000 loss to the loan owner. If you can make up the missing payment and otherwise satisfy the lender it may be possible to avoid foreclosure. Not foreclosing is an act of forbearance.
This post is about not being foreclosed on, especially if you lost your job.
Let’s just call it “letting you off the hook” albeit temporarily…
Fannie Mae today it is going to have banks provide six months of forbearance(let you off the hook for 6 months) for unemployed homeowners without Freddie Mac’s prior approval and up to an additional six months with prior approval.
This means unemployed owners may be eligible for up to 12 months ofget out of jail free so to speak. Freddie Mac’s forbearance options are being expanded at the direction of the Federal Housing Finance Agency and will take effect on February 1, 2012.
Mortgage servicers can now approve unemployed ... more
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