Foreclosure Options

Foreclosure Options to Avoid Losing Your Home

Due to the problems in our current economy, a lot of people are facing foreclosure. This can be devastating and it can leave many feeling like nothing can be done to change it. A lot of people will sit back and let the bank take their home, but some have been willing to fight back. Despite what you may have heard, there are many foreclosure options available to get through this tough time. It will take a lot of persistence and communication, but you can make it happen. Here are several options you have as a homeowner to avoid foreclosure.

Negotiating with Your Lender

foreclosure options When you’re backed up on payments it’s very important that you contact the lender quickly. They  may be willing to work with you, and it will delay the sale. It is very important to call before the  foreclosure process has fully begun. The foreclosure process begins fully after the homeowner  receives the notice of default. After that point, you’ll only be given about 120 days to clear things  up before your house sold. Your lender should be willing to explain the details of the situation and  come up with a variety of foreclosure options that will enable you to keep your home. Of course,  you will have the best chances of making negotiations prior to the notice of default being filed. If  they have started this process already, then you will need to make contact within the 90 day  period to try and work out a solution.

Don’t Be Afraid to Call Your Lender

The top reason that most people lose their homes is a failure to contact the lender. Many times people just don’t seek foreclosure options because they’re just too upset and embarrassed about their financial situation. There’s also a misconception that lenders aren’t concerned about preventing the foreclosure of your home. This is not true, because lenders are actually losing tons of money buy possessing and selling your home this way. Banks are in business because they make interest on the loans that they give. A foreclosure really prevents them from gaining any profit, so they would much prefer that you find a way to continue to pay. That’s why you should really just face your fears and stop avoiding the letters and phone calls. Talk to your lender and see what foreclosure options are available to help.

Preparations for the Conversation

There are some preparations you need to make before contacting the lender. Be sure to gather any documents that can confirm your current expenses and income along with all the information related to your loan account and the withstanding balance. Speak directly with the customer service teams of your bank, be completely honest, and prepare to give every detail about your financial hardship. Lots of times you may qualify for payment programs that reduce or even pause your payments for a short amount of time. Here are some of the foreclosure options your lender may provide:

Loan Modification

This is where a lender will make an agreement with you to modify the loan terms. For example, a lender may offer to extend the loan for a number of years, or to lower its interest considerably. This can take some of the stress off and give you a great opportunity to catch up on missing payments. It can also make your regular payment schedule something easier to maintain once you’ve caught up. This option is ideal for people who still have steady income, but have a continuing problem that has caused them to be in default.

Repayment Plan

This foreclosure option enables you to delay a payment and divide the balance among a series of proceeding payments. This is a great option for those who are recovering from a temporary financial problem, like a car repair bill, dentist bill or doctor bill that took up most of their current paycheck. Repayment plans assume that you will be able to completely cover the pending balance in a short amount of time, and that you’ll be capable of paying a larger payment each billing cycle until you’ve caught up.

Reinstatement

This involves delaying a payment or paying off a large unpaid balance at a future date. This may be a great foreclosure option if you expect to receive a large amount of money from something like a tax return. If you have documentation to prove the date and the sum of money that you will acquire it, the lender may be willing to set this up for you.

Forbearance

In this foreclosure option the lender will agree to significantly reduce your payments or delay them for an extended amount of time. This option is available for those facing serious financial issues that will take long term changes to resolve. Usually this option will require a lot of paperwork to prove that your current income has significantly changed in the past little while. Once the forbearance period has ended, you may also be given some of the previous options to further help you stay current on your payments.

Enlisting a Professional

If you’re still nervous about talking to a professional, don’t really understand the foreclosure options available to you, or feel that your lender is treating you unfairly, then you may want to seek a foreclosure assistance service. There are many places that can offer foreclosure help, but you should make a point to only speak with those approved by the US Department of Housing and Urban Development. They’ll explain the process of foreclosure, the options offered by your lender, and the exact actions you should take to save your home. Just be careful about foreclosure assistance programs that require you to pay them upfront for any services. There is a lot of fraud going on and people taking advantage of homeowners in these situations.

Borrow from Friends

Another foreclosure option available is asking your friends for assistance. It may not seem logical to take out one loan to pay another, but your friends and family have a better understanding of who you are and what you’re going through. They want to help you and they’re more lenient and forgiving than a bank. People often avoid this option until they reach the edge of their desperation. This is because of embarrassment, strained family relationships, and just not wanting their friendships to the tangled in a financial mess. Though, if the option is there, and you’re certain that you can pay them back, it’s worth doing to save your home.

Foreclosure can be a very difficult thing to face. Dealing with serious financial struggles and possibly losing your home can be very devastating. However, you should know that there are many foreclosure options available to stop this from happening. All you have to do is speak with your lender to see if you qualify for a payment program, get a hold of a foreclosure assistance service, or consult family and friends. Don’t sit back and let bank sell your home. Keep fighting because financial problems are always temporary.

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