Help for Bank of America Customers

As of August 2010 over 2 million homes are listed as foreclosed which shows there is still a great need for mortgage companies to work with homeowners to help them stay in their homes. Bank of America has decided to delay foreclosing on homes in 23 states while the company determines if they rushed too soon to foreclosure on some homes.

The states affected are: Connecticut, Delaware, Florida, Hawaii, Illinois, Indiana, Iowa, Kansas, Kentucky, Louisiana, Maine, Nebraska, New Jersey, New Mexico, New York, North Dakota, Ohio, Oklahoma, Pennsylvania, South Carolina, South Dakota, Vermont and Wisconsin.

In some cases employees signed foreclosure documents without verifying the information. GMAC and JPMorgan Chase have also made the same mistake. This issue may lead to lawsuits due to homeowners contesting foreclosures that may not be valid. Pressure is being added to mortgage industry professionals by state attorney generals who are working hard to enforce foreclosure laws.

In some states, mortgage lenders can foreclose quickly on delinquent homeowners. Freddie Mac and Fannie Mae and Freddie Mac stated that they are informing mortgage companies to follow proper procedures.

It is uncertain how this decision will affect homeowners. If you are a Bank of America mortgage customer call the company at the 800 number provided on your mortgage statement to get information about your foreclosure or pending foreclosure.

In the future, go with your gut if you feel you have not been treated fairly by your mortgage company or you feel that proper procedures have not been followed. You can also contact HUD or a certified housing counselor to get a second opinion on any housing paperwork or issues that you are concerned about or have questions about. You can also file a complaint against your mortgage company with the Federal Trade Commission, Better Business Bureau or your state attorney general's office. If you have a FHA mortgage loan you can file a complaint with HUD.

6 Options If You Are Facing Foreclosure

Put away those credit cards and stop charging if you are facing foreclosure. Put yourself on a budget quickly and continue to monitor your finances until your other debts are paid off so you do not get into the same situation in the future. Whatever decision you make get it in writing from your lender. Consult a tax advisor to determine rules regarding foreclosure. Ask the lender if the foreclosure option chosen will be reported on your credit report. Here are 6 options to take if you are facing foreclosure.

1. Special Forbearance. When a lender arranges a repayment plan based on your current financial situation or and may provide a temporary reduction or suspension of your mortgage payments. You may qualify for this if you've recently experienced an involuntary reduction in income or an increase in living expenses.

2. Mortgage Modification. You may be able to refinance the debt and extend the term of your mortgage loan for the missed payments. This will help you catch up by possibly reducing the monthly payments to a more affordable level. You may qualify if you've recovered from a financial hardship and your net income is less than it was before the loan default.

3. Partial Claim. Your lender may be able to work with you to obtain an interest-free loan from HUD to bring your mortgage current, if you qualify.

4. Pre-Foreclosure Sale. This will allow you to sell your property and pay off your mortgage loan to avoid foreclosure and damage to your credit rating. If you're unable to afford the house long-term, you may sell the house yourself before the foreclosure sale date and save some of your equity.

5. Deed-in-lieu of Foreclosure. As a last resort, you may be able to voluntarily "give" your home back to the lender. This may help your chances of getting another mortgage loan in the future.

6. Short Sale. You can sell your house for less than what you currently owe on the mortgage loan. This is win-win for you and the lender. Your home does not have to go into foreclosure, you don't have to file bankruptcy and the process is much faster. The lender saves money without having to file foreclosure proceedings but does lose money by not getting the full price of the home during the sale. The buyer gets the house at a reduced price.