<p>Foreclosure law varies by state, but the two most common processes are judicial and non‑judicial foreclosure. In judicial states (e.g., New York, Florida), the lender must file a lawsuit, which can add 60‑90 days to the timeline. In non‑judicial states (e.g., California, Texas), the lender can proceed after recording a notice of default, often completing the sale in 120‑180 days.</p> <p>Key legal milestones include:</p> <ul> <li><strong>Notice of Default (NOD):</strong> Typically issued after 90 days of missed payments. It publicly records the borrower’s delinquency.</li> <li><strong>Notice of Sale (NOS):</strong> Sets the auction date, usually 30‑45 days after the NOD.</li> <li><strong>Redemption Period:</strong> Some states allow borrowers to reclaim the property by paying the full balance plus fees before the auction.</li> </ul> <p>Understanding these timelines helps you know when to intervene. NMHL’s legal liaison team can explain state‑specific rights and help you file a timely loss‑mitigation request.</p>

<p>NMHL has built a suite of programs specifically for borrowers facing hardship. Below is a deeper dive into each option, eligibility thresholds, and typical outcomes.</p> <h3>1. Loan Modification</h3> <ul> <li><strong>Interest‑Rate Reduction:</strong> Up to 2.5 % lower than the original rate.</li> <li><strong>Term Extension:</strong> Extending the amortization to 30‑40 years can reduce monthly principal‑and‑interest by 15‑30 %.</li> <li><strong>Eligibility:</strong> Credit score ≥ 580, debt‑to‑income (DTI) ≤ 45 % after modification, and documented hardship (e.g., job loss, medical emergency).</li> </ul> <h3>2. Forbearance</h3> <ul> <li><strong>Duration:</strong> 3‑12 months, with the option to extend once.</li> <li><strong>Interest Cap:</strong> 5 % annualized on the deferred amount.</li> <li><strong>Eligibility:</strong> Recent hardship (within 12 months), DTI ≤ 50 % before forbearance.</li> </ul> <h3>3. Repayment Plan</h3> <ul> <li><strong>Structure:</strong> Add missed payments to future installments, typically increasing the monthly payment by 10‑20 %.</li> <li><strong>Eligibility:</strong> No prior defaults in the last 12 months, DTI ≤ 48 % after plan.</li> </ul> <h3>4. Short Sale & Deed‑in‑Lieu</h3> <ul> <li><strong>Short Sale:</strong> Sell the home for less than the balance; NMHL negotiates a deficiency waiver up to 50 % of the shortfall.</li> <li><strong>Deed‑in‑Lieu:</strong> Transfer ownership to the lender; NMHL works to secure a release of liability and a credit‑repair package.</li> </ul> <p>Each program is evaluated on a case‑by‑case basis. Our dedicated case managers keep you informed at every stage.</p>

<p>While any delinquency hurts your credit, strategic actions can limit the damage:</p> <ul> <li><strong>Report Payments Promptly:</strong> Even during forbearance, ensure the lender reports the account as "current" or "in forbearance" rather than "delinquent."</li> <li><strong>Dispute Inaccuracies:</strong> Use the <a href="https://www.consumerfinance.gov/" target="_blank">Consumer Financial Protection Bureau</a> to dispute any erroneous late‑payment entries.</li> <li><strong>Re‑build with Secured Credit:</strong> After a modification, consider a secured credit card with a $500‑$1,000 limit, paying the balance in full each month.</li> <li><strong>Monitor Your Score:</strong> NMHL offers a free quarterly credit‑monitoring report for borrowers in a loss‑mitigation program.</li> </ul> <p>Most borrowers who complete a loan modification see a credit score rebound of 30‑50 points within 12 months.</p>