A foreclosure bailout is the term commonly applied to mortgage loans that homeowners can take out when they are facing foreclosure. Although the loan terms and costs are similar to loans that can be used in other situations, these particular mortgages are marketed to homeowners who have fallen behind in their monthly housing payments.

There are two common sources for foreclosure bailout loans, both of which offer somewhat similar programs. The first source is the small number of banks, either state or federally chartered, that specialize in loans based on equity. The second source is hard money lenders, which are essentially private sources of funding that make investments in real estate.

One of the first solutions that homeowners facing foreclosure consider is simply refinancing their loan. After the first couple of times that they are turned down, though, reality quickly sets in: refinancing in foreclosure is quite difficult. This should come as no surprise, as lenders have been increasingly unwilling to make loans to people with low credit scores and no equity in their properties. Traditional loans may be out of the question for homeowners in foreclosure, who will have to try to qualify for a foreclosure bailout loan.

A foreclosure bailout is the term commonly applied to mortgage loans that homeowners can take out when they are facing foreclosure, and they differ quite a bit from traditional mortgages from a bank or broker. Although the loan terms and costs are similar to loans that can be used in other situations, these particular mortgages are marketed specifically to homeowners who have fallen behind in their monthly housing payments.

A foreclosure bailout is a type of loan that is made to the owner of a distressed property in an effort to assist them to prevent foreclosure on their home or property. It is, essentially, a 12- or 18-month lease and buy-back loan. It will leave you still in possession of your property, albeit at less than ideal terms.

Particular lenders, called equity lenders, specialize specifically in this type of loan. They will offer you a foreclosure bailout by entering into a contract with you to purchase your home for a 12-month period, and then re-sell it to you at that time at the same price they paid for it.

As Uncle Sam issued check after to check to keep Wall Street bankers afloat, American taxpayers–who were picking up the tab–grew increasingly resentful of paying for others’ mistakes. But when President Barack Obama announced a $75 billion plan to lower monthly mortgage payments for up to four million distressed homeowners in mid-February, frustration turned to rage. But the Obama administration has pitched its housing fix as one that would help all homeowners–not just troubled ones.

Foreclosure filings were reported on more than 2.3 million American properties last year, according to RealtyTrac. That’s one for every 54 housing units and an 81 percent jump from 2007.

The Mortgage market is tough right now; foreclosures are on the rise, there is a glut of homes on the market, and no end in sight. President Bush has recently unveiled his FHA program to bail out homeowners in need. The program he plans to roll out is called FHA Secure and is supposed to help struggling homeowners with adjustable rate mortgages, no longer able to pay their mortgages due to rising payments, refinance into new, FHA secured, fixed-rate mortgages. This sounds like something we need right now, but like anything, there are two sides to this coin.

There is a lot of talk among blogs, news media, and even just people in general of a bailout coming from the federal government to help homeowners in foreclosure. The problem with this kind of talk is that many of the debaters seem to believe that they will be given a choice or any kind of input into the decision to reward certain groups with any federal money. In fact, amidst all of the debate, the real bailout is already being distributed.

But one thing is certain: everyone will definitely not get a bailout from the central government. The politicians will delay for as long as possible to prevent this; that is, they will spend so long talking about who to bail out and how much to give them and what kind of bailout to provide, that they will never get around to actually doing anything. Already, nearly 20,000 new homes go into foreclosure every day and nothing will be done to help any of their owners.

It’s real easy to hear someone talk about what they would do if their lender had the legal right to foreclose on their boat, and an entirely other matter to have that property foreclosed on in real life. We can talk all we want, but the facts are that there are many companies that don’t care what will happen to the boat once they decide to penalize you for late payment or no payments.

With a boat, it’s a little different. Depending on the size of the vessel, a lender may decide to simply help you out in your situation. In fact, we’ve found that over the past three months, more lenders are willing to lend a hand with your issues, than to turn you over to a collection agency. A collection agency on a boat foreclosure is simply someone working on behalf of the lender because the lender isn’t really set up to spend the kind of time necessary in getting the past due monies collected. So they send it to a collection firm.

Larger boats might go back to the lender. Defaulting on these kinds of loans is similar to defaulting on a home loan. It’s a large loan and there are ramifications to not paying the money back in a timely fashion. First, the bank or lender, in a boat foreclosure, will probably get the boat in their possession. How this makes sense, instead of working with a firm that at least can keep the vessel in good order – is beyond the scope of this website. The fact is many boat foreclosures end up with a boat not being able to be salvaged at a price that the lender can really break even.

With boats, you’ll find that they auction off the vessel and then use that money to pay down the loan. This makes little sense because most of the time the original lender is just months away from making good on a payment. They boat is sold, money received and placed toward the debt, and what happens is everyone loses. The reason why lenders can’t see this disconnect in the system – their system – is because they are so removed from it.

We tried to get several boat foreclosure experts to comment on this action and none were available for comment. Just goes to show you that they are happy with what is going on as long as it pays down some of the loan.  Why they won’t work with the borrower in the first place is beyond comprehension. Yes, many have their chance to work with the lender and mess that up – but there is a large percentage that would like to but can’t because lenders are too complicated to work with. They have rules that can’t be bent, and terms that they say they cannot change.

The disconnect is where the employee at the lending facility does not take charge and create an environment where boat foreclosures don’t have to happen, one where they can work with any case, come back and re-address cases until they come up with a solution.

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