If you own your home and have missed a few payments, the foreclosure process can start very quickly. As this is a stressful time for most people, it’s important that you quickly learn everything you can about foreclosure alternatives and try to save your home, or at least your credit.
If you want to see the nightmare a foreclosure causes, see the Bills.com Foreclosure Consequences article and get educated quickly.
Options to Stop Foreclosure.
The first thing to know is that your lender is willing to stop the foreclosure process. In fact, almost all lenders hate foreclosing. That’s right! Because it is one of the most adversarial financial processes, they hate it too.
Mortgage lenders typically lose money when they foreclose, since most foreclosed homes are worth less than the value of the mortgage. Plus, the foreclosure process is expensive to manage and is stressful for everyone. What that means is that you have options. So learn about foreclosure alternatives and start moving to stop foreclosure fast!
Stop Foreclosure Yourself vs. Hiring a Firm to Stop Foreclosure
There are many firms that charge a fee to negotiate on your behalf. Basically, those firms will work on your behalf to negotiate forbearance, loan modification, or to save your home. Be very careful of someone who wants to BUY your home, and if someone offers you that service make 100% certain that you first try to assess the equity value in your home and if there is equity available you can either take on the burden of trying to sell your home on your own, or look into someone who will offer to buy your home for cash. Just make sure they can close quickly, as time will be of the essence.
Your Foreclosure Options
This list of four options assumes your attempts to negotiate a short sale or deed in lieu of foreclosure were unsuccessful, as were your attempts to find a government program to refinance or renegotiate your mortgage.
Foreclosure Mediation to Stop Foreclosure. This service negotiates with the lender to repackage the loan so that the borrower can become current again. It will help save your credit, keep you in your home, save your home equity and appease your lender. This process has to happen pretty quickly, and could involve one or more of the following:
- loan modification
- payment forbearance
- loss mitigation
Deed in lieu of foreclosure. This is where you are unable to pay for the house and you voluntarily give the house back to the lender. This is subject to a deficiency judgment yet counts as a “less serious” foreclosure on your credit. However, not most lenders will not accept this arrangement.
Sell your house. You lose your home in this situation but you may save some of the equity in your home. Include the standard 6% Realtor fee when calculating your net proceeds from the sale. Also, be aware that because you are in foreclosure and under intense time pressure to sell your home, you may not receive the full market value for the home. Worse yet, three months from now, you may not have sold your home and now owe an additional three payments on your home and still face foreclosure. This is where we can help! We can close quickly with no money out of your pocket, handle all the paperwork and help you avoid the nightmare a foreclosure causes to your life and credit.
File for bankruptcy. This can be a very expensive and drawn out process through which there is no certainty of outcome. In the end, a court decides the outcome of all your assets and will leave you with a severely damaged credit record and the strong possibility of no home. If you are considering bankruptcy, you should contact an attorney to discuss this option. You can learn more about bankruptcy at the Bills.com bankruptcy page.
In the end, there are a variety of considerations when you try to stop foreclosure, so educate yourself and look into foreclosure alternatives before walking away and losing your house and good credit.