How to Stop a Foreclosure
February 18, 2009 by admin
Filed under Foreclosure, stop home foreclosure, stopping foreclosure process
As a homeowner, the last thing to expect is for your property to be foreclosed. But it does happen. The good thing about foreclosures is that they can be prevented. The first thing you need to do is to avoid a Notice of Default. If you feel you won’t be able to meet your financial mortgage obligation, never forget to call your lender.
Never ever ignore letters from your lender because your lack of response will only make things worse. By communicating with your lender, you are opening your lender to the possibility of offering you different options to help you in your situation. These include
Forbearance
In forbearance, the lender agrees not to take legal action against you and allow you to work out a repayment plan that you can afford.
Debt Forgiveness
Although it rarely happens, it might just happen in your case. Debt forgiveness happens when you agree on a scheme that will make you current on your payment after missing one or two payments. The lender will forgive the missed payment/s while you go current in your future payments.
Repayment Plan
If you missed a payment, your lender might allow you to add an extra amount on your monthly payment for one year (to make up for the missed payment) until you become current.
Changing the terms of your loan.
If your mortgage is adjustable, your lender can freeze the interest rate or adjusting the interest rate to something more manageable for you. Your lender might also modify your loan to extend the amortization period.
Loan refinancing
Loan refinancing is all about increasing your loan balance to re-amortize the loan. You need to have sufficient equity and meet your lender’s guidelines to qualify for loan refinancing.
You will have very limited options when your lender files for a Notice Of Default, that’s why it’s very important that you call your lender first BEFORE he calls you. Lenders are often not willing to work out any of relief options (mentioned above) once foreclosure proceedings have begun. When your lender has filed a Notice of Default, you will be given time to reinstate your loan, or make your payment current, pay the filing cost of the foreclosure, and stop the foreclosure from happening.
If you’re not able to raise the money to reinstate your loan, you can always sell your home, consider a short sale, or sign a Deed-in-Lieu of Foreclosure.