USDA loans are mortgages backed by the U.S. Department of Agriculture offered by lenders for purchasing homes in eligible rural areas. When you’re struggling to pay your USDA mortgage, the idea of navigating a USDA foreclosure is probably at the top of your mind.
USDA loans are similar to conventional loans. However, there are important differences you should be aware of, including how they go through foreclosure.
A foreclosure attorney can help you understand the foreclosure process and how to navigate it to avoid foreclosure.
Joshua Denbeaux is an experienced New Jersey foreclosure attorney dedicated to fighting for homeowners’ rights. Contact Denbeaux Law today to learn more about foreclosure and how we may be able to help you avoid foreclosure.
USDA Loan Foreclosure Process
The USDA is focused on avoiding homeowner foreclosures. If you are facing foreclosure with a USDA loan, your lender should follow the USDA’s loss mitigation guidelines to try to help you avoid foreclosure.
Your lender should contact you if you’re behind on your mortgage payments to discuss your options. They should work with you to find the best loss mitigation option for your situation. Unlike other kinds of loans, there are more stringent requirements during foreclosure to give you options to recover.
An attorney can help you through the loss mitigation process. Your attorney can work with you as you negotiate with your lender to keep your home and avoid foreclosure.
Stopping a USDA Foreclosure
Your lender should offer you options to avoid foreclosure. With a USDA loan, there are a variety of different options that may be available to help you stop a foreclosure.
Loan modifications are the main option to stop foreclosure for USDA loans. With a loan modification, you can work with your lender to modify the terms of your mortgage to make it more affordable for you. Loan modifications usually change your mortgage interest rate or loan term to create lower monthly payments and make your USDA mortgage more affordable.
Pre-foreclosure sales or short sales are an option to avoid foreclosure. With a pre-foreclosure sale, you sell your house, typically for less than market value, to pay off your remaining mortgage balance. To be eligible for a pre-foreclosure sale with a USDA loan, borrowers must have failed to meet the requirements of an approved repayment plan or special forbearance agreement. USDA loans emphasize homeowners’ ability to stay in their homes. A sale will only be encouraged if borrowers cannot make payments to keep the home.
A deed in lieu of foreclosure is another option to avoid foreclosure if you cannot make mortgage payments to keep your home. A deed in lieu of foreclosure is an agreement between a homeowner and a lender where a homeowner gives the deed of their home to the mortgage lender to avoid foreclosure.
However, because the USDA is motivated to keep homeowners in their homes, it will often work with you to avoid short sales and deed-in-lieu agreements unless there are no other suitable options.
Work With a New Jersey Foreclosure Defense Attorney
There are a variety of options available to help you avoid or stop foreclosure with a USDA loan. Your lender should work with you to help you avoid foreclosure. But that doesn’t mean you should go it alone. While the USDA wants to help homeowners, not all lenders will follow the rules or have the same intentions.
A foreclosure attorney can help you explore your options to avoid foreclosure and determine the best option for you. Your attorney can also help you through negotiations with your lender to achieve the best possible outcome for your situation.
Contact Denbeaux Law today to learn more about your options to stop a USDA foreclosure and how we may be able to help you.
