Lenders do not really want you to foreclose a property, but often it becomes a necessary step o protect their interest. The ideal way to stop a foreclosure is to prevent the filing of the Notice of Default. You should contact your lender the moment you realize you will be unable to meet the obligations of the mortgage.
In this following article, we will be listing a number of options both before and after the filing of the Notice of Default to stop a foreclosure of your property. For more expert tips engage legal professionals at https://www.friscialaw.com.
There are certain mortgage and loan modifications that you can go for after you have contacted and negotiated with your lender. These are as follows,
A time frame to make up for the payments
Lenders might or might not agree to wait before taking a legal recourse when you fault on your loan repayment. Forbearance might be offered by the lender which allows you time to make the repayment.
Debt forgiveness rarely occurs but your lender might waive off your obligation, but you will have to be current after missing a payment or two. Negotiate well, and you can catch a lucky break.
Spreading out the missed payments
If your lender agrees to it, you can spread out the payments over a longer term. This will ensure you have more time on your hand to make the payments. This repayment plan is more common and can continue until you catch up with your loan default.
Changing the terms for your loan
Some mortgages can be adjustable loans, and the lender might freeze the interest rate or modify it to a more manageable rate. The amortization period might also get extended which is called note modification.
Refinance to add payments back to the loan
This happens when you have sufficient equity, and if you meet the guidelines set by the lender, your loan balance might be increased to include the back payments.
Options after you have been served the notice
When the lender has filed the Notice of Default, your options are limited, but you still have some. Let us have a look,
You can sell your home
Get hold of an expert real estate agent and get the opinion of the market value to sell your home. You can go for discount brokers or full-service brokers but do compare the two and determine which is as per your requirements and time-frame.
You can consider a short sale
A short sale might affect the credit score, but it’s not as bad as a foreclosure. Your agent needs to negotiate with the lender and get his/her approval to redeem the pre-foreclosure.
Sign a Deed-in-Lieu
You can deed the home back to the lender. This will, however, affect your credit the same way as the foreclosure since technically you are just transferring all the debt to the lender to cancel the foreclosure.
Consider filing for bankruptcy
A legal filing of bankruptcy action can stop all the foreclosure actions. You need to call a legal expert who specializes in the filing of bankruptcy to understand the options, costs and time frame involved for the due process. It won’t really stop the foreclosure but can put it on hold.
These are the ways you can stop the foreclosure of your property or avert it till you are able to make up for the loan defaults.