The holiday season is a busy time of the year for many Colorado residents. From buying gifts for others to attending work and family gatherings, it seems there is never a shortage of things to do in a given day. The most important aspect of the season for most, however, is spending time with family and friends, often within the confines of one's home. Unfortunately, this time of togetherness can be threatened by foreclosure if an individual is having trouble making his or her monthly mortgage payments.
Those who have already experienced a loss of a home through foreclosure recently received good news through a federal policy change. It used to be the case that individuals whose homes were backed by Fannie Mae or Freddie Mac had to repurchase their homes at the amount they owed on the mortgage. This posed significant problems because the amount owed on the mortgage often exceeded the value of the home itself. Now, individuals will be eligible to buy back their homes at current market value.
The change is estimated to impact about 121,000 homes that were foreclosed. However, a number of individuals will not benefit from the change, either because they have already found alternative arrangements, or because they may not qualify for financing on the purchase.
Others are currently in the process of having their homes threatened by foreclosure, and may be wondering what options exist for them to stop foreclosure. One effective option that exists is Chapter 13 bankruptcy, which imposes an automatic stay on creditors' attempts to collect debt. This includes a stay of foreclosure proceedings.
During the stay, individuals may be able to save enough money to become current on their payments, or work out another plan that is beneficial in order to address the threat of foreclosure. Accordingly, individuals under threat of foreclosure should examine whether bankruptcy is best for them, and what relief it can provide to their stressful situation.
Source: Washington Post, "Thousands of people can now buy back the homes they lost to foreclosure," Dina ElBoghdady, Nov. 26, 2014