It is a nightmare for any homeowner to get a foreclosure notice from their lender when the outstanding amount seems bigger than the actual market value of the mortgaged property. However, if the owner knows the ins and outs of what options exist, then foreclosure can be stopped or at the very least, delayed to give you more time to figure out a solution.
Here are few ways to delay or stop foreclosure. These are not ranked in any particular order.
- Loan Modification - This is pretty much the troubled homeowner’s holy grail. A number of things can happen in a loan modification. Remember, though, that even if you are granted a loan mod, you’ll still need to meet the new obligations set forth by the lender or you’ll be right back where you started.
- Reinstatement - At some point, the lender stops accepting any money unless you pay in full. If you can somehow manage to scrape together enough money, your loan can be reinstated and you will be brought current on the loan.
- Refinance – Most people facing foreclosure probably can’t refinance, but you should at least check and see if this is an option.
- Short Sale - This is a far better alternative to foreclosure. There are plenty of resources about short sales on this site.
- Bankruptcy - This option is pretty low on the list of things you should do. The credit implications are long-term and depending on what you do, it is not certain to entirely stop your foreclosure. Seek qualified legal advice.
- Forbearance - If your problems are temporary, your lender may grant a forbearance to help you get caught up. Once you’re back on track, the loan terms will resume in the manner they were originally set at.
- Make Your Mortgage Payments - Ok, ok, you’re probably not reading this to find out that paying your mortgage will stop foreclosure, but if you want to know how to stop foreclosure, there’s nothing more surefire than this.
- Deed-in-lieu of Foreclosure - This is one of the last options before foreclosure. It’s very similar in that the bank takes over the deed, but in doing so, they agree that you are free of your obligation so no legal action can be taken. It also avoids becoming a matter of public record.
- Find inaccuracies on the housing contract. You could have a lawyer look over your housing contract to see if the lender did anything wrong that would negate your obligation. Don’t hold out too much hope for this one, though.
The key takeaway here is that foreclosure has a lot of alternatives. You don’t have to just lose your home without a fight.
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