If you are faced with a foreclosure on your home, then you need to find ways how to stop it from happening. Most home owners dread looking into the facts that can lead to a foreclosure.
As a homeowner, when you bought your house, a foreclosure is the last thing that you could ever think of happening to you. But there are various factors that can lead to a foreclosure such as, job loss, a divorce, sudden death in the family, excessive debt obligations, sudden illness among others.
When you miss a mortgage payment, then you should know that chances are that you could be on the path of a foreclosure. This can result into losing your home and all the money that you have invested in the property.
When you are faced with a foreclosure you need to act fast and wisely in order to stop the foreclosure process. One of the ways to avoid a foreclosure is by not filing of a Notice of Default. No lender wants to deal with a foreclosure, but as a way of protecting their interests, they will file a Notice of Default.
How to stop a foreclosure on your home
After the lender has filed a Notice of Default, then you are left with fewer options. That is why it is better if you call your lender to inform them you will be falling behind on your payments for various reasons. Inform your lender about your financial problem and ask them to refrain from issuing you with a Notice of Default. In most cases, the lender does not want to take away your home, since the often lose money when a foreclosure happens.
Explain to the lender what has led to your failure to pay for the mortgage. This could be due to a job loss, a medical expense, or large utility bills. You should be honest with your lender as a way of finding means on how to stop a foreclosure on your home. In most cases a lender will be reluctant to work out a repayment plan once the foreclosure procedure has begun.
The lender can give you a certain period of time to bring the payments to the current repayment plan and you will have to pay for the filing of the foreclosure and stop the foreclosure. This is normally refereed too as reinstatement of your loan. Selling the house is also another way that you can stop a foreclosure on your home. Ask a real estate agent about the market value and sell your home based on the market value.
Considering a short sale is also another way of stopping a foreclosure from happening. A short sale will definitely affect your credit but this is not as bad as a foreclosure. You can negotiate with your lender and find out is the lender agrees with your idea of short sale.
Signing a Deed-in-Lieu of Foreclosure is also another way of stopping a foreclosure on your home. In this case, the home owner gives the lender a well prepared and notarized deed. The lender can then cancel the foreclosure action and forgive the homeowner of the mortgage.
An arrangement can be made by the lender, whereby the home owner can stay in the home until they have found a place to move into. As a homeowner in default, you can negotiate the right to retain occupancy even during the foreclosure period. You can also work out a more affordable repayment schedule with your lender which can help stop a foreclosure.
The lender can also refer you to a credit facility that will help you to analyze your finances and help you to develop a proper repayment plan for the mortgage that will bring it to the current amount. Sometimes the lender can agree to suspend or reduce your regular monthly mortgage repayments. Better still, the past due amount can be reduced by increasing your payments over a period of time.