Foreclosure Avoidance Techniques
With many people throughout the United States looking at foreclosure
situations, the question is often asked; how to avoid a foreclosure? There are some things that a homeowner can do to either avoid a foreclosure or to stall the process to remain in their home longer.
First Foreclosure Avoidance Steps
- Visit the US Department of Housing and Urban Development (HUD) to learn about options you may have in this situation.
- Speak with a financial counselor or planner.
- Hire an experienced real estate attorney versed in foreclosure law.
- Talk with your mortgage lender.
Although these are some of the first matters involved in dealing with a bank foreclosure situation, there are some other things you can do to avoid a foreclosure
. Most of these steps involve talking with your lender to determine what can be done.
Foreclosure Stalling Techniques
- Talk with the lender about a change in the mortgage loan interest rate.
- Ask if the mortgage loan can be modified to an amount you can afford to pay.
- See if the lender will allow missed payments to be made up over time.
- The mortgage holder may be agreeable to forgiving one missed payment.
- The lender may agree to add back payments to the loan.
- The mortgage holder may offer to write another loan for the outstanding debt.
The main technique involved with processing a foreclosure or forestalling it, is to continue your discussions with the lender. Mortgage holders are often more lenient or more favorable to borrowers who actually communicate their circumstances to them. It is when you simply disappear and cannot be contacted that the lender is more apt to move towards legal action.
Real estate law is complicated and can vary from state to state. It is important to speak with an attorney who specializes in real estate law before making any decisions. Whocanisue.com can help you find an experienced real estate attorney
in your area.
Once a Notice of Default has been filed, your options become limited.
Sell Your Home
- Sell your home
- Consider a short sale
- Sign a Deed-In-Lieu of Foreclosure
This option can be frustrating, but it is an option you might consider depending on your circumstances.
Consider a Short Sale
When you sell your home for less than what you owe the bank or lender, it is considered a short sale. It is not as bad as a foreclosure; however, your foreclosure attorney
or agent will need to negotiate with the lender to see if they will cooperate on a short sale.
Deed-In-Lieu of Foreclosure
A deed-in-lieu of foreclosure is a disposition option in which a borrower voluntarily deeds collateral property (the home) in exchange for a release from all requirements of the mortgage. This technique will still affect the borrower’s credit just like a foreclosure impacts their credit score.
Additionally, one should negotiate with the lender to stay in the house until another residence can be found. The lender may not be very agreeable to this plan; however, remind them that if the foreclosure process was continuing, you would still be residing in the home.
Home Mortgage Lenders
Given the recent housing situation and the increased number of foreclosures, lenders are more willing to work with borrowers who are eager to step up to the plate and determine a mutually agreeable plan to stay in their residence and continue with their mortgage payments. They would much rather work with you than be stuck with a bunch of foreclosed homes.
Lending institutions are currently under direction from the Presidential Administration to work with consumers on loan modification programs. An experienced real estate lawyer would be able to assist you in determining if you qualify for those programs as well as provide you with all options available to you.
So no matter what your situation is currently, there are some ways that you can negotiate with the financial institutions and/or lenders to attempt to avoid a foreclosure. If that isn’t successful, you may buy yourself some extra time while you explore other housing options.