If you find that you may be facing foreclosure there are options available. You may be able to stop the foreclosure and avoid losing your home. If you know you won't be able to make payments then contact your lender as soon as possible.
Always keep in mind, lenders are in business to make money and so don't expect them to lay out all of the options for you, they'll most likely go with the one that seems the most profitable for them. There are options available.
Forbearance - This option is where the lender will allow you to delay payments for a short while, and once the forebearance period is over your account should be brought current.
Reinstatement - This is a way to stop foreclosure if you have enough lump sum funds to bring your account current by a specific date.
Loan Restructuring - This is one of the most common ways to avoid foreclosure. In this scenario the terms of the original note are modified whereby the interest rate may be lowered resulting in lower monthly payments that you can afford.
The term of the loan may be extended as well. The major advantage to a loan restructure is that late payment reporting to the credit agencies is stopped which minimizes the adverse effects on your credit report.
Repayment Plan - A repayment plan will stop foreclosure if you can make payments on a past due account. The lender may agree to add a portion of the past due amount(s) to current payments until the account is made current.
Short Sale - You can also stop foreclosure with a short sale where the lender may allow you to sell the house for less than the loan amount due and any money you receive will go to the lender. The lender will have to take a loss but it's better than foreclosing and paying to maintain the property and taxes. More information ...
Deed In Lieu Of Foreclosure - This is usually the least favorable option for the lender, in this scenario to stop foreclosure the lender may agree to you voluntarily giving up the property as long as there are no other liens or judgments on the property.
Some may require you try to sell it first for a specific time period and after expiration of that period they will take the property and you walk away.
Whatever your position is, we recommend that you talk to a real estate agent. They may be able to help you choose what is best for you, and maybe they can even help you sell the home.
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