7 Ways to Stop a Foreclocure
#1). If you have NOT missed a payment yet, but know you are going to, the first step you must take is to contact your lender and let them know your situation. If you've lost your job or have some other type of hardship going on let them know. They give you time to help get your life back togather bit you must call them as soon as you know you're going to miss a payment. The longer you wait, or if you wait until you actually miss your payment, makes it more difficult to ultimately get the problem solved.
#2). Ask for Forbearance.
This allows you to delay payments for a short period of time, with the understanding that another option will be used afterward to bring the account current... for example, if you know you'll have the funds to bring your account current by a specific date because of a guaranteed sum of money you're receiving.
#3). Ask for a repayment plan.
This is where the lender agrees to add a certainamount of the first missed payment onto each of the next subsequent payments. These plans provide some breathing room for you if you only have short term financial problems such as a sudden expensive repair or a medical expense that makes it to difficult to pay your mortgage for one month.
If you have already missed to or three payments and owe a couple thousand dollars in lender legal fees, the lender of your mortgage may still try to arrange a repayment schedule. But you will likely have to pay a third to a half of the delinquent amount up front, and then pay off the portion of the remaining balance each month for a year or more. Also, never ignore the lenders letters or phone calls. Ignoring the problem won't make ot go away and if your going into a foreclocsure process, there are other fees and cost involved and ignoring them only makes these worse.
#4). Loan Modification Plan
You may also be eligible for a loan modification plan, designed for people who can't afford repayment plans. In a modification, the lender actuallt adjusts the terms of the loan to make it affordable. It may lengthen your amortization schedule or lower the interest rate to cut the monthly payments, or roll the past due amount into the loan and re-amortize the new loan balance so you can pay the additional debt back over time.
#5). Short Refinance
Some companies may be willing to offer you a Short Refinance too. With these, the lender agrees to forgive some of your debt and refinance the rest into a new loan. This way, the lender still gets more money than they would by foreclosing on you.
#6). Deed in Lieu Foreclosure (DIL)
A Deed in Lieu of Foreclosure (DIL) is an option in which you voluntarily deed your property back to the lender in exchange for a release from all obligationsunder the mortgage. Unfortunately, there is no way to do this without hurting your credit, unless you get the mortgage company to report your mortgage account as paid in full. You may face income tax issues resulting from the lender forgiving part of the debt ( which the IRS will likely treat as income to you, even though you don't receive any cash in the transaction ), but you might be able to get yourself out of the hole and start over again sooner rather than later.
#7). Chapter 13 Bankruptcy
If you can afford your normal monthly mortgage payment, but can't afford to make up the delinquent amount and legal fees because your lender offered a really harsh repayment plan, you may want to consider filing Chapter 13 Bankruptcy. Doing so temporarily halts the forclosure process and can force the mortgage lender to accept a more friendly repayment plan. This is the Last Resort and can still negatively affect your credit.
If none of these strategies work, there is still one other option.
As you may know, a foreclosure is devastating to your credit rating and can affect it for 7 to 10 years. What's more, buys or even renting another home in that time period may be impossible for you. But there is one more option where I may be able to help you personally.
Even if you can no longer afford your home. You can still protect your equity and keep a good credit rating.
Here how:
Click the "Last Option" link for your Last Resort to stop your Foreclosure.