Foreclosure Bailout Mortgage

Any time a mortage goes 120 days or more late, most banks consider the loan in default and foreclosure status. A Foreclosure Bailout Loan is a mortgage designed to save homeowners from foreclosure by their banks. It is basically a refinance loan and the home owner takes out a mortgage to pay off the current loan thats in default.

The lenders base the loans on the equity in the home and not necessarily your credit score or credit history. This means they are protected by the higher risk should they have to take the property back. These are usually short term loans designed to keep someone from going to foreclosure. This allows you time to list and sell your property or get back on your feet again and refinance.

Most foreclosure bailout loans require at least 30% equity in the home. While many potential borrowers do not fall into this category there are some that do and can benefit from the bailout programs.

When compared to the option of selling your home or loosing the home if foreclosure proceedings are completed, the higher interest rate associated with a bail out is usually the best alternative. These bail out programs are a form of refinance, they are not a lease back program. You still maintain ownership of the property.