How to Stop Foreclosure
Facing foreclosure can be a frightening prospect. But there are some strategies to help you avoid foreclosure, although your chances will be better the sooner you take action.
There are many sources of foreclosure help. Virtually all mortgage lenders and even some government agencies offer foreclosure prevention programs for borrowers who have fallen behind on their mortgage payments. Some lenders offer loan modification/restructuring, which can prevent foreclosure by reconfiguring the loan terms, such as taking the missed payments to the end of the repayment timeframe.
Forbearance is another option that can help you avoid foreclosure by essentially pausing payments on your loan for a period, allowing you to liquidate assets, sell off some stocks, get a new job or tend to other measures that would enable you to get and stay current on your mortgage.
If you are current on your mortgage payments but are at imminent risk of falling behind, refinancing may be an option. You must be up to date on your home loan payments to refinance.
Third party debt counseling firms and foreclosure lawyers can also be a tremendous help. They can negotiate with the lender on your behalf, helping you arrive at a favorable resolution. Debt counseling firms can also eliminate other debts, so you'll have more money to put toward your mortgage.
A foreclosure lawyer may be able to identify grounds upon which you can stop foreclosure in court. For instance, if you have been the victim of a predatory lender, you may have grounds to legally contest the foreclosure. Financially distressed homeowners may opt to hire a bankruptcy lawyer, allowing you to discharge other debts in bankruptcy, which freezes all foreclosure progress. This can enable you to improve your overall financial situation so as to avoid foreclosure.
Another option is a short sale. You may also choose to work with a real estate investor who can pay cash for your home and close quickly. To prevent foreclosure, a deed in lieu of foreclosure arrangement may be suitable, whereby you essentially abdicate your house to the lender to avoid the damage of a foreclosure on your credit history.
There are many options to avoid or stop foreclosure. Each situation is unique, so the best choice varies amongst borrowers. But one fact always remains accurate: the sooner you address the situation, the better the outcome.