Foreclosures
Can You Prevent Foreclosure?
Yes. But it is going to require work on the part of the borrower. If you have a mortgage, you cannot dodge your lender by ignoring the problem. So respond to your lenders inquires if you have missed a payment. Better still, contact your lender when you determine that you are having a problem paying your mortgage. Most problems occur when the borrower denies that there is a problem and choose to not deal with the problem.
What Alternatives to Foreclosure are available?
There are several alternatives that a borrower can pursue:
- Contact a HUD approved housing counselor for advice. Call 1-800-569-4287 to reach a local Housing Counselor.
- Learn about the foreclosure laws in your State to determine what a lender can legally do if you miss mortgage payments.
- Get current on your mortgage loan if possible. Review your living expenses and cut where you can. Also, list your assets and sell any that you can to obtain cash to pay the mortgage. Pay your mortgage first and spread out your credit card payments.
- Hope for Homeowners Program is intended to help borrowers refinance into more affordable loans. A list of participating lenders can be found at www.hud.gov. You should review with your current lender and your HUD approved housing counselor if this is a viable program for you.
- Bankruptcy can stop or merely stall a foreclosure but you should definitely seek legal counsel to learn all the facts about bankruptcy and its effects before choosing this alternative.
- If it is possible, your mortgage can be assumed by a third party who then owns your home. Your lender must approve of the third party assumption and grant any required waivers. Be sure that you are aware of any obligations on your part should the assuming party default on the mortgage.
- Forebearance is an option plan that can give a temporary reduction or suspension of your monthly mortgage payments based upon the lender’s ability to later increase the borrower’s payments when he/she is more financially stable. The delinquent amount will be spread over a longer period of time.
- Developing a new payment plan that will allow for a regular monthly mortgage plus additional payment toward the delinquent amount.
- Sell the house either through the regular sale method or as a pre-foreclosure sale. www.gainesvilleshortsales.com
- Deed in Lieu of Foreclosure is where a lender allows the borrower to sign over the deed. This does save the lender from going through the foreclosure process but the effect on the borrower is still severe.
Why You Shouldn’t Wait for Foreclosure
If foreclosure is only inevitable then it will happen. Of course that decision is based upon the lender. Of course, foreclosure can derive from unpaid ad valorem taxes, home owner association dues or income taxes. Whatever was the cause of the foreclosure action, all legal methods available should be utilized to stop it. It has the most severe consequences on your credit and the time you will wait to qualify for a new mortgage. There could also be tax consequences for debt reduction. Also be aware that some of the options discussed in the preceding paragraph can cause you to lose any owner equity you might have in your property. It is definitely best to try to work out an arrangement with your lender if at all possible.
