I would like to share with you seven ways that you can stop a foreclosure.
If you have NOT missed a payment yet, and you know that 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 can give you some time to help you get your life back together, but 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, it makes it more difficult to ultimately get the problem solved.
This is when you want to ask the bank 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 your 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.
At this point you can ask your bank for a repayment plan. This is were a lender agrees to add a certain amount of the first missed payment onto each of the next subsequent two 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 too difficult to pay your mortgage for one month.
If you have already missed two 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 a portion of the remaining balance each month for a year or more.
Also, I must express the importance to never ignore the lender’s letters or phone calls. Ignoring the problem won’t make it go away and if you’re going into a foreclosure process, there are other fees and costs involved and ignoring them will only makes them worse.
You may also be eligible for a loan modification plan, designed for people who can’t afford a repayment plans. In a modification, the lender actually 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 balance so you can pay the additional debt back over time.
Some banks may be willing to offer you a “short refinance” in this case the bank agrees, to forgive some of your debt and refinance the rest into a new loan. This way, the bank or lender still gets more money than they would by foreclosing on you.
A deed in lie of foreclosure (DIL) is an option in which you voluntarily deed your property back to the lender in exchange for a release from all obligations under 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 home and start over again sooner rather than latter.
If you can afford your normal monthly payment, but you can not 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 will temporarily halt the foreclosure process and can force the mortgage lender to reconsider a more friendly repayment plan. This is when they will entertain the possibility of a short refinance once again. Chapter 13 bankruptcy is a last resort, and it will 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, which create’s a problem when buying or even renting another home in that time period and may be impossible for you. However there is one more option where I may be able to help you out personally.
Even if you can no longer afford your home, you can still protect your equity and keep a good credit rating.
Hear’s How:
Up until a few days before the bank forecloses on your property, you have the opportunity to stop that process by having someone purchase your property.
I may be willing to do this for you, I arrange creative, legal and ethical ways to buy property or assume mortgages from people who need help. I may even be able to let you stay in the house, depending on your situation. The bottom line, though, is this: if your situation allows it, I can stop your foreclosure and often put money BACK in your pocket so you can start over in a new more affordable home.
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