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A “Pre-foreclosure” is the term referred to by mortgage lenders as the time period from when the lender notifies the borrower that they have defaulted on a payment, and when the sale of the property to the lender at an auction is finalized. Pre-foreclosure sales can be an option to borrowers who need to pay off their mortgage. The United States Department of Housing and Development has organized the Pre-foreclosure Sale Program which allows the borrower who has defaulted on payments to sell the house, and use the profits from the sale to pay off the mortgage debt.

This can mean great news to prospective homebuyers. When the borrower is looking to sell his house, they are looking to sell their property for either at least 63% of their outstanding debt, or 82% of estimated sales proceeds, and they are in a hurry to sell so delinquent payments do not accumulate. This usually results in properties that are priced to sell, and sellers who are in a hurry to sell them. These purchases can be great deals for first time buyers, and such purchases, just as the large percentage of properties out there, are applicable to have a FHA loan taken out on them.

The easiest way to avoid pre-foreclosure, or foreclosure in general is to make your mortgage payments on time, and never to default. MortgageLoanPlace.com offers the service of finding great FHA loans, among other types of loans, which are perfect for first time, or repeat homebuyers. Finding a payable loan that works for you is easy with thanks to our helpful customer service representatives, and our database of frequently asked questions. Visit our loan pages, and you’re next loan is just a few clicks away.

There is another option out there for low to moderate income families who are looking to become more financially secure by owning a home.  That option is the AmeriDream Charity Program.  AmeriDream, Inc. is a non-profit organization that offers gift funds of up to ten percent of a home’s purchase price to be put towards the down payments and closing costs.  This program is only available for eligible home buyers and they are required to return all excess funds not used towards down payment and closing costs.  All funds must be refunded if the sale is not closed by the scheduled closing date.

Here’s how the program works:

1. The first step is to contact AmeriDream, who will help you find a qualified real estate professional in your area, as well as a mortgage professional if you are not working with one already.

2. Then you’ll have to find and contact a lender for a pre-approval letter for a loan that will accept the gift funds from AmeriDream, like FHA or conventional loans.

3. Next, begin your search and find a home that you would like to purchase.

4. After making an offer on the home and the contract is agreed upon, your gift fund application will be submitted for you to AmeriDream by your lender.

5. Finally, you will receive your notice of approval for AmeriDream.  Go to your closing and buy your new home.

To become eligible to receive gift funds from the AmeriDream Charity program contact a lender, a real estate professional or AmeriDream, Inc.  This program is easy for buyers and is not limited to first-time homebuyers.

The general consensus among most people is that FHA mortgages and conventional mortgages do not differ all that much.  After all, the borrower still must go through most of the same application and approval processes, and the terms (length of loan and interest rate) usually don’t differ much from the conventional marketplace.

Of course, FHA loans (especially lately) are being highly touted as the best alternative in the near future for first time homebuyers and low to middle-income families alike.  For nearly 60 years, from their inception in 1934 up through the turn of the century, FHA financing was one of the most common ways that Americans financined their homes.  Now that subprime and ARM loans have lost steam, the the FHA is back.

‘Loss Mitigation’ is a term tied to the fact that FHA loans are financially ‘backed’ by the government, and it is something that consumers can sometimes overlook.  In fact, if a borrower falls behind on their payments due to anything from job loss to medical crisis, the lender can recover their lost income from the government and tack the costs onto the loan.  The borrower simply repays the  missed payments later on.

This little caveat of FHA mortgages allow many to avoid foreclosure and also make the products  more attractive to lenders as their investment is protected no matter the unexpected things that might arise that make it hard for a borrower to pay their mortgage.