A Foreclosure Bailout Loan is a mortgage designed to save homeowners form having the properties being foreclosed upon by their banks. It is considered a refinance loan. The homeowner takes out a mortgage to pay off the current loan that is in default status.
Most foreclosure bailout loans require at least 40% equity in the home and credit scores over 500. While potential borrowers do not fall into this category, there are some that do and can benefit from the bailout programs.
Foreclosure bailout refinances are based on the value of your home amount owed on current mortgages. Typically the real estate loan is not more than 65% of the value of the property. These loans require an appraisal to determine the value of the collateral. During foreclosure process, charges from attorneys and the bank can accumulate significantly, so it is important to get updated pay off quotes from the bank to compete the foreclosure bailout refinance.
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