Stop Foreclosure Fast with 4 Methods
If you are experiencing pre-foreclosure due to unexpected circumstances, including an adjustable rate mortgage (ARM) reset, there are a few sollutions to keep your home and make your house payment more affordable or sell the property to get out of debt and high mortgage expenses.
- Negotiate a payment plan or loan modification to reinstate your mortgage loan with the company’s loss mitigation department.
- Refinance your loan
- Bankruptcy
- Negotiate a short sale
Keeping the property
If your ultimate goal is to keep your home and not enter foreclosure to continue living in the peropty, your options are the following: negotiate a loss mitigation offer, refinance the loan or file for bankruptcy protection.
Negotiating a Loss Mitigation Offer
You must contact your mortgage company immediately to make sure you can qualify for Loss Mitigation, which is handled by the Loss Mitigation department. A loan modification or repayment plan will be worked out to include partial payments of the amounts owed and an extension to the loan terms.
Refinance your loan
Refinancing your loan is another option, but can only work out if you have the equity needed to refinance your loan(s). If you have any mortgage late payments on your credit report, the terms in the new loan may end up being worse than what you have already.
Bankruptcy
Filing for bankruptcy can stop all of the creditors from seeking to collect debts from you (including the mortgage) until the debts are sorted out according to the law. Although, filing for bankruptcy isn’t as easy as it used to be with the new bankruptcy laws in place that went into effect in the fall of 2005. The new banktuptcy laws requires invidividuals to go thru a minimum 3 month credit counseling period prior to filing for bankruptcy. This process may be too late if you’ve already missed payments on your mortgage since as NOD (Notice of Default) has already been filed.
If you need to sell the house
Selling the house via a short sale
If you must sell your home and your loan balance and costs to sell exceed the property worth and you do not have any money to make up the difference between what you owe and what you need to sell the property for, then you will need to get your lender(s) to agree to discount the loan(s) balance owed and get them to pay your selling costs plug the real estate agent’s commission.
You will have to prepare a package of documents to deliver to the bank or lender(s) to make your case to selling your home via a short sale. It needs to be proven that selling your home will cost less than a foreclosure (foreclosures are quite expensive for lenders).
Your real estate agent can help you complete the short sale package.
