The recent housing crisis has left many families facing the possibility of foreclosure. In April, 2008 it was estimated that one out of every 194 U.S. households had received a foreclosure filing. with this many families dealing with foreclosure, there are many people asking the question of whether or not there is some type of government help available to stop foreclosure.
While congress debates on what to do about this issue, there are already several government agencies that may be of help to distressed homeowners.
HUD (The Department of Housing and Urban Development)
HUD provides education and referral resources for homeowners. HUD offers sliding scale counseling and may be helpful when it's time to negotiate with your lender. HUD can also educate you on your options and may be able to provide assistance if you think that your lender is not acting in good faith. They also maintain current resources and a list of programs that provide relief to homeowners.
HUD's website can be visited at http://www.hud.gov for more information.
FEMA (Federal Emergency Management Agency)
If you have been the victim of a natural disaster such as a flood or storm related disaster, FEMA may be able to provide you with assistance if your financial problems are related to your losses. While this situation does not apply to the majority of homeowners, not everyone who qualifies knows that this help is available.
Federal Housing Administration (FHA)
The FHASecure Program is an existing government program designed to assist troubled homeowners who have fallen behind on payments due to adjustable rate mortgages and interest only loans. This program assists homeowners in refinancing their ARM's to fixed rate mortgages. The FHASecure program operates with the help of mortgage lenders who provide new loans to homeowners.
This program is not for everyone. Families with fixed rate loans already are not eligible and everyone still has to qualify for these new loans. What this means is that you should have decent credit and some equity in your home already for the FHASecure program to be of much help to you.
What Other Options Are There?
Aside from government programs, there are ways that homeowners can receive help directly from their lender. This is the most common and ultimately the best solution for many folks. By discussing your problems with your lender's loss mitigation department, you may be surprised to find that many lenders will negotiate with you to help bring your loan current and with payments you can afford.
Early action is the key to success when it comes to avoiding foreclosure. As soon as you fall behind, pick up the phone and open lines of communication. If you are proactive, there are a variety of private resolutions that can be explored between you and your lender. Ultimately, your lender does not want to foreclosure on your home any more than you want them to and they can be quite helpful in negotiating a mutually agreeable resolution.
Friday, August 15, 2008
Secrets About Your Credit Score
Your credit score gets checked whenever you try to apply for a credit card, apply for a loan, or make any kind of credited purchase. Your credit score is basically a number that represents how trustworthy the business world believes you to be as far as making your payments is concerned, a higher number indicating more confidence in your ability to pay. Your credit score is derived from information found in a credit report.
All the financial activity you have engaged in over the past seven years is recorded in your credit report. If you have filed for Chapter 7 bankruptcy or closed an account that had been in good standing, this will continue to appear in your credit report for ten years.
Your three digit credit score is calculated based on a formula developed by credit report companies. They go over information connected to your credit history to determine your score. California established a law in 2000 that allows anyone applying for credit to have access to their credit score. Now federal law permits you access to information that the credit card companies used to keep secret, like how your credit score is determined.
Credit scores are not difficult to calculate or understand. The actual score is made up of a number of variables and falls somewhere between 300 and 900. The score is based 35% off of your history of payments, 30% on current debt, 15% on how long you have had credit, 10% on what kinds of credit you have access to now, and 10% on how many times your report has been asked for. After comparing those pieces of information with other similar consumers, your credit score is calculated.
Suggestions for improving your credit score:
- Maintain your credit rotating at about 25% of your total credit limit.
- Don't be late paying. Making payments earlier than necessary does not incur any penalty.
- When trying to get a loan, shop around for one during a period of thirty days so that all requests made to check your credit score are considered to be one total request.
- Know your credit score. Each year, you can check your credit score for free by visiting annualcreditreport.com. Doing so will help you prevent problems from escalating until they create large problems.
Does the credit card company you deal with use two cycle billing? If you don't know, you could be paying even more interest than you think if you don't pay off your credit card every month. Find out what two cycle billing is and why it's so bad on the Debt Smackdown website at http://www.debtsmackdown.com
All the financial activity you have engaged in over the past seven years is recorded in your credit report. If you have filed for Chapter 7 bankruptcy or closed an account that had been in good standing, this will continue to appear in your credit report for ten years.
Your three digit credit score is calculated based on a formula developed by credit report companies. They go over information connected to your credit history to determine your score. California established a law in 2000 that allows anyone applying for credit to have access to their credit score. Now federal law permits you access to information that the credit card companies used to keep secret, like how your credit score is determined.
Credit scores are not difficult to calculate or understand. The actual score is made up of a number of variables and falls somewhere between 300 and 900. The score is based 35% off of your history of payments, 30% on current debt, 15% on how long you have had credit, 10% on what kinds of credit you have access to now, and 10% on how many times your report has been asked for. After comparing those pieces of information with other similar consumers, your credit score is calculated.
Suggestions for improving your credit score:
- Maintain your credit rotating at about 25% of your total credit limit.
- Don't be late paying. Making payments earlier than necessary does not incur any penalty.
- When trying to get a loan, shop around for one during a period of thirty days so that all requests made to check your credit score are considered to be one total request.
- Know your credit score. Each year, you can check your credit score for free by visiting annualcreditreport.com. Doing so will help you prevent problems from escalating until they create large problems.
Does the credit card company you deal with use two cycle billing? If you don't know, you could be paying even more interest than you think if you don't pay off your credit card every month. Find out what two cycle billing is and why it's so bad on the Debt Smackdown website at http://www.debtsmackdown.com
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