Stop Foreclosure

Homeowners that are facing a foreclosure often times do not want to deal with the facts that created the situation in the first place. If they think back to the time when the home was first purchased, foreclosure was probably not even a thought. Homeowners never plan to end up in these situations, however, there are times that foreclosure is near and the fear of losing their home is a reality.

Foreclosures can be reality for many reasons

Not many people knowingly commit mortgage fraud, intentionally buying a home with no intention on ever making a payment. Most homeowners are faced with extenuating circumstances that force them into not making the mortgage payments. Here are a few of the reasons that people fall into home foreclosure:

  • Unemployment
  • Medical emergency or sudden illness
  • Family death
  • Separation or divorce
  • Over extended credit obligations
  • Adjustable interest rates that increase
  • Major home repair expense

Ways to Stop Foreclosure

Once a lender files a “Notice of Default” your options are limited even more then before. It is better to call your lender before you fall behind in your payments; lenders are not willing to workout a repayment plan once the foreclosure process has started. Once a “Notice of Default” has been filed you are given a specific time line in which to bring your payments current and stop foreclosure on your home. In the even that you are unable to bring the mortgage current, or the lender will, not work out a suitable solution there may still be a few options to stop foreclosure:

Sell Your Home – Talk to a real estate agents and find out what the current market value of your home, you also need to find out the average DOM (days on market) that your home may be on the market. Hire a reputable real estate agent and broker to ensure that your home is marketed properly.

Consider a Short Sale – If the market value on your home is less then the amount that is owed, you may have to consider a short sale to avoid foreclosure. Your real estate agent can offer you advice regarding the market value and possibilities of selling your home for at least what is owed to the bank. While a short sale will have a negative impact on your credit, it is far less then a foreclosure. You or an agent or firm representing you can attempt to negotiate a short sale. Not all lenders will allow them, but in order to stop foreclosure and reduce the impact on your credit it is a viable option.

Deed-in-Lieu of Foreclosure – This option relinquishes your rights to the property and voluntarily gives the home back to the lender. In this case, the lender will often release you of the mortgage agreement, effectively canceling the contract and stopping foreclosure. However, many lenders will tell you that doing a deed-in-lieu has the same affect as a foreclosure on your credit.

Working something out with the lender is often your best option, in some cases; the lender will allow you to remain in the home until you find other housing arrangements. Negotiate the right to retain occupancy during this time; remind the lender that in the event that the foreclosure has to go through, you would still have the right to remain in the home anyway.