How Fannie Mae tries to avoid foreclosure

 If you have a mortgage with a lending institution and find yourself in financial trouble, remember, the last thing they want to do is foreclose of your home.  Fannie Mae tries to avoid foreclosure at all costs because it is not only expensive for them, they clearly understand that no one wins under those circumstances.  That being said, there are circumstances where Fannie Mae cannot avoid foreclosure.

In order to avoid foreclosure, Fannie Mae works with all their lenders and guides them whenever possible to work with their borrows rather than foreclose on them.  So what does that mean?  First, they may adjust the repayment schedule by allowing the borrower to miss a few payments so that they can catch up financially.  They may modify the loan to reduce actual payment size.

Another option Fannie Mae incorporates to avoid foreclosure is to work with the lenders and borrowers with a possible pre-foreclosure sale.  What this means is that if the borrow has not way of making payments, the home is sold and all mortgage debt and missed payments are paid from the proceeds.  Anything left over goes to the homeowner.  Keep in mind that everyone wants to help you, not take your home.