Rent to Own to Avoid Foreclosure

by Peter Vernon on Stop Foreclosures

One of the options that distressed homeowners explore in order to avoid foreclosure is to sell their home. But sadly, this option is quite challenging since looking for a buyer in this tight housing market is next to impossible.

One Massachusetts homeowner was lucky enough to have found one but the couple was having difficulties getting approved for a loan. After convincing the homeowner that they are really interested in purchasing the property, a “rent to own” agreement was struck.

For the next six months, the couple religiously paid their rent. But for the past three months, they were unable to do so. This forced the homeowner to evict the tenants. To make matters worse, the property was discovered to be trashed.

Now, the Massachusetts homeowner is once again facing foreclosure. Aside from the mortgage payments, she will have to fix up the property if she wants to attract potential buyers.

According to ACORN, a non-profit organization that helps troubled homeowners keep their homes, it will probably be better if lenders are contacted when facing foreclosure.

Since most lenders would prefer re-negotiating the existing mortgage terms, distressed homeowners will be surprised at how easy it will be to avoid foreclosure. The important thing is to let lenders know entire situation of your finances.

If it becomes too much for you to handle, organizations like ACORN can help you out. Mortgage calculations will be done according to your financial capacity and they could even stand as mediators between you and your lender.

Acting quickly is actually the key to stopping foreclosure on its tracks. There are no reasons why you should wait until the last minute to discuss with your lender options like a new mortgage repayment plan or loan modification.

If worse comes to worst, you can always discuss a short sale transaction with your lender. You just need to make sure that you are qualified for this option before considering it. In any case, taking action is better than standing around and waiting for your home to be repossessed.