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Homeowners in North Carolina who are at risk of foreclosure may be concerned about losing their homes if they are unable to pay their mortgages. For someone already experiencing financial difficulties, the prospect of foreclosure, bankruptcy, or even homelessness could be extremely stressful. Families facing foreclosure in Charlotte have hope.
Whether you’re nervous about foreclosures due to loss of a job, the coronavirus pandemic, or an unexpected and expected life event, struggling homeowners in Charlotte, NC can find organizations that provide resources to prevent foreclosure.
Who Can Help?
If you’re behind on your mortgage payments but have not yet received a notice of foreclosure proceedings, you still have options to avoid foreclosure on the property in the first place. Some options are available to any homeowner in America, and others are specific to the city of Charlotte or the state of North Carolina.
Free Assistance for North Carolina Homeowners
NC residents can find advice from several statewide and federal programs. Consumers with lower income may have more benefits, including financial assistance.
the State Home Foreclosure Prevention Project
Families in Charlotte concerned about the prospect of foreclosure can reach out to a program called the State Home Foreclosure Prevention Project, as the first step to avoid foreclosure.
This program, which is under North Carolina Housing Finance Agency administration, can provide a housing counselor to reach out to your lender on your behalf. If you’re a low-income homeowner, you may also qualify for free legal services.
This type of assistance can be a great place to start, because the program makes use of HUD-approved counseling agencies across NC. HUD-approved means that the employees would be certified by the federal Department of Housing and Urban Development, which ensures their recommendations and advice would be in line with federal and local regulations.
the American Rescue Plan
The American Rescue Plan has already provided many citizens with direct financial help in the form of a relief check during the coronavirus pandemic, but what homeowners may not know is that there were also funds allocated to help with mortgage payments and utilities.
In North Carolina, the NC Housing Finance Agency is administering the NC Homeowner Assistance Fund, which uses the money provided by the ARP to avoid mortgage delinquencies and foreclosures. If your primary residence is in North Carolina, you may be eligible for:
1. housing payment assistance
People who own a single family home, a condo, a mobile home, or a townhouse, could get money to help them pay on their mortgage when they’re in a period of financial difficulty.
2. mortgage reinstatement money
Even if homeowners are already in the foreclosure process, there is money available to help them pay back some late payments or other costs that may come up when they’re in negotiation with a lender to prevent foreclosure.
3. other related costs
It may be that in order to be able to afford your mortgage payments, you’ve had to use money that would have otherwise been used for things like property taxes or homeowner’s insurance. The NC Homeowner Assistance Fund can help account for the cost of these subsidiary expenses.
Community Link is an organization in Charlotte that helps homeowners, renters, and even persons experiencing houselessness. Their Foreclosure Avoidance Counseling may be just the thing a Charlotte homeowner needs to steer clear of the foreclosure process.
Options to Avoid Foreclosure
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If a North Carolina resident reaches out to a program like those above, they may recommend some foreclosure prevention tips that apply no matter your location. North Carolina citizens could try some of their strategies to prevent the foreclosure process from getting too far along.
Contact Your Lender
The bank or mortgage company that services your loan doesn’t benefit from mortgage delinquencies any more than the borrower does. They are investors, and, as such, have an incentive for you to stay in your home. After all, if you lose your home, they lose the mortgage.
Since it’s in everyone’s interest – the borrower, the investors, even the city – to keep you in the property, one of your first calls could be to your business (or businesses) in charge of your mortgage. They have several options to avoid foreclosure:
1. a forbearance
A forbearance means that you will pay less or nothing on your mortgage for an agreed-upon period of time. At the end of that time, you’d usually make one payment of the total amount owed on the loan up to that point.
This could be a good strategy for someone who has experienced a temporary setback but expects to be in a good financial situation again soon.
If someone is expecting a large monetary windfall, such as an inheritance or a bonus from their job, this may be a good choice, as they’ll be sure to be able to pay when the forbearance period is over.
2. a loan modification
If you don’t expect to have access to more cash anytime soon, the lender may allow you to restructure your loan so that you can afford payments. They may work out a lower interest rate, a longer loan term, and/or add the missed payments on to the bulk of the loan.
All of these can result in a lower monthly payment, allowing the owner to catch up without having to worry about losing the home.
Another option for lower monthly payments is refinancing. In this case, rather than changing the terms of an existing mortgage, you would get an entirely new mortgage on the same property.
The new loan would be for much less, since you’d have already been paying on the previous mortgage. If you still have good credit, refinancing could be quite beneficial.
If You Can’t Keep the Home
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Even if you aren’t able to stay in your North Carolina property, foreclosure isn’t the only option. In some cases, it’s preferable to explore short sales or even bankruptcy rather than allowing the foreclosure process to end in a sale.
Until the sale, the property isn’t actually considered “foreclosed”, but with some advance planning you may be able to sell the home in a way that is less damaging to your credit.
1. a Short sale
If you can get your loan servicer to agree to the deal, you may be able to sell the house in something called a short sale. This is when the lender agrees to accept less for the property than the house is worth, and you are responsible for the difference between the price you sell it and the amount remaining on the mortgage.
There are, of course, closing fees and other paperwork required, but if you just aren’t going to be able to get the cash to rescue the mortgage, this can be an option that prevents a big hit to your credit.
For families in North Carolina who can’t stop the foreclosure proceedings from starting and who won’t have the cash to pay it off in time, bankruptcy may actually be a better choice than allowing the foreclosure to continue.
Chapter 7 isn’t as likely to allow someone to keep the home, but it could buy some time to work out another option, such as refinancing. In Chapter 7, assets are sold off to satisfy the consumer’s debts.
Chapter 13 may be a better option, as it allows owners to retain their assets and instead provides a system for working out repayment options on all debts. Often, this results in the cancellation or reduction of some debts and creates a plan to pay off the others.
Bankruptcy in any form is going to be a hit to one’s credit, but it will still be less than the damage one might suffer from a foreclosure sale. It’s not the first choice for most people, but it may be a useful option to have on the table.
For Homeowners in Charlotte, North Carolina, There is Help
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If a homeowner has found it difficult to keep up with their bills, it can be stressful to realize their house could be lost to foreclosure. However, struggling families in NC have other ways to handle a potential foreclosure apart from letting the lender control whether or not their home is sold out from under them.
Knowing where to look for services that provide assistance to homeowners can make the difference between being forced to foreclose and striking a deal with the lender to pay off the mortgage loan with better financial support.
If you’re a single family home owner in the city of Charlotte, there are agencies and services specifically set up to help you avoid foreclosure without spending all your income on legal services and fees. A homeowner only needs to be aware of the funding and assistance available to help with their loans.