Foreclosures are never a good sign to anyone who aims to keep there homes, however because of certain aspects in ones life these can unfortunately happen.
1. Contact Your Lender
The first and upmost important thing to do is call your lender and let them be aware of your situation. By doing so, they might file a Notice of Default to protect their interest. Do not be embarrassed or ignore the calls from your lender, they can always negotiate with you to work out an alternative way to keep your home from foreclosing.
2. Different ways to Avoid Foreclosure
- Forbearance – Lenders might give you time to make up your payments before they take legal action against you. However, the lender may require you to make up the difference later on.
- Partial Claim – This is when certain government loans with provisions let borrowers who meet the specific criteria apply for another loan.
- Repayment Plan – The lender might add either an extra $100 a month to your payment or more depending on what they might find suitable for a certain amount of time until you are caught up.
- Note Modification – The lender may adjust the interest rate to fit your budget before it increases.
- Debt Forgiveness – In rare cases will this ever happen, but this occurs when the lender might waive your obligations.
3. Ways to Stop Foreclosure
If you are already in a situation where you are already in a foreclosure there are different alternatives to stop it:
- Sell your home
If you can no longer pay for the house, sell it. With a help of a professional, like a real estate agent, get an estimate of the market value and the average DOM. Also consider a short sale, which may be more dominant in this economy. To learn more click here
- File for Bankruptcy
Filing for bankruptcy will legally halt your foreclosure process enabling you to figure out what needs to be done. This will help you get out of the mortgage situation until further notice. The foreclosure case cannot be opened by your lender except with a courts approval. Seek consultant attorney to determine if you are legible for bankruptcy filing.
- Deed-in-Lieu of Foreclosure
This would concur you to hand the deed over to your lender if no one is interested in buying your house. The homeowner would arrange a properly written and notarized deed which allows the lender to forgive the mortgage canceling the foreclosure action. This action may have a similar effect on your credit as a foreclosure.