How to Stop Foreclosure – Things You Probably Never Thought You Could Do

Should you find yourself in a tricky situation where you are unable to pay your mortgage bill, look for ways on how to stop foreclosure.Most homeowners are given the notice after missing more than 3 mortgage payments. However, this will depend on the terms of your mortgage contract. There are states where borrowers are given up to 27 days to make payments.

The reality is that most lenders would rather let you keep the home than taking it back. This is because home prices have been dropping in the last few years and the industry has significantly changes putting them at a loss when dealing with the foreclosure process.

With that said, if you’ve recently gotten a foreclosure notice- take a deep breath and relax because all is not lost.  Here are several alternatives that you can still consider to prevent losing your home.

Assess your financial situation

The first thing you need to do is to draw up a budget that contains a list of your expenses and income. It will help you to better understand where your money is going. Understand the reasons for the financial difficulty. Did you make an investment that is eating up most of your income? Was there a loss of income along the way? This will help you to approach the problem using factual information.

Talk to your lender

The sooner you approach the lender the better it will be for you. They will try and assess the reason for you financial difficulty and come up with a short term solution for your problem. For instance, if you lost your job or spent money on medical bills, the lender may rework a payment plan that is suitable for your current situation.

How your lender can help

The lender can decide to increase the time you are required to pay for the loan or even lower the interest rate to make it more affordable for you. Some lenders will even change loans from a fixed to an adjustable rate so as to make it easier for you to pay it back. Loan modifications are ok but ensure that the repayment plan you agree to is sustainable. The worst thing would be to re-default a few months after the loan is modified.

Consider selling your home

Sometimes selling your home may be the best solution especially if you are unable to afford any of the repayment plans offered by the lender. Your lender may agree to a short sale offer because it offers them a quick and effective way of getting rid of the home and taking back their money.

File for bankruptcy

You may also decide to file for bankruptcy in order to prevent the mortgage lender from foreclosing your home. When you file for bankruptcy an automatic stay is effected. This stay ensures that the foreclosure process is stopped until the bankruptcy process is complete. this only works to delay the foreclosure process for a month or two as you explore other alternatives.

Contact a lawyer

If you end up in a situation where the lender doesn’t agree to hear you out or rework the payment plan, it’s time to seek legal advice. Loan modification lawyers will protect your rights and help you to stop the foreclosure process. 

Lawyers have the experience on how to stop foreclosure. They can help you file a lawsuit against the lender to prove that they did not comply with the minimum state requirements or violates the home owner bill of rights. Lawyers can also look into the foreclosure process and show that the lender made a grievous error which should stop the foreclosure from taking place.