Foreclosure Freeze - Who Does It Help, How Does It Work, What To Know

There is a lot of misconception out there about the foreclosure freeze and who it really helps, what it takes to qualify, and how it works. My goal is to demystify it a bit. I have listed some bullet points to help:

The freeze is temporary. It freezes legal efforts to remove delinquent borrowers for 30 days while lenders and borrowers work together on a payment plan. This is a joint effort by 6 of the nation's largest lenders One big difference between this and other options discussed in the past is that it is available to people regardless of their loan types. Even if you do NOT have an ARM, it may help. (Some people have Pay Option ARMs or fixed rates that are high, too). (ARMS have the highest rate of delinquency though) The borrower does not need to be subprime to qualify as with other programs like the Bush plan. Any kind of mortgage is okay.

When does the homeowner qualify?

Once they are 90 days or more behind in their payments, lenders will send letters asking the owner to call. Borrowers will be asked if they ewant to stay in their home. If they do, they will be offered financial counseling.

Important things to note: