Is it Possible to Stop Foreclosure?
Posted on December 9, 2008
Filed Under Foreclosures | Leave a Comment
As soon as we receive a notice saying it’s time for a foreclosure, what is the first thing that comes up in our mind? It is nothing but there is no way to stop foreclosure and we have to bid farewell to our sweet little home. I know this is right in few cases; however, not always. If you can educate yourself on the rights that you have rather than alarming when you know about foreclosing your home, you definitely can stop foreclosure.
Let us first figure out why we face a foreclosure situation. What are the reasons?
a)Jobless
b) Loss of a family member
c) Increase in the rate of interest
d)Excessive debt
e) Major illness
As we now know the reasons for why a foreclosure happens, let us see how to avoid foreclosures.
Timely payments: Paying your debts in a timely fashion is one of the best ways to avoid foreclosures. I know this is not possible every time. When you fail to pay your interests’ lenders file “Notice of Default” as they wish to protect the interests. They too don’t want to force you to foreclose but they want to save their money. Once you clearly know that you will not be able to pay the money, it is a good idea to speak with the lender. Rather than asking you to foreclose, they might give you some brilliant ideas as they want money. Suggestions from your lender could be any one of the following:
a) Forbearance: He might work with an alternative repayment plan like extending the loan duration or cutting down the interest or anything that is feasible to both of you.
b) Waiver: He might waive the interest.
c) Spreading the repayment: He might give you an option where in you can spread the amount that is due every month and pay them.
d) Refinance: He might lend you more by re-amortizing your loan.
When a lender can provide you with so many options, why not use it. First talk with your lender and see for options that will work out.
How to stop foreclosures:
The above said options would workout when you haven’t received the foreclosure notice. If you have received one, is there a way to stop the foreclosures. Yes…you have. What are they?
a) Selling your home: Rather than opting for foreclosing and get a bad credit report, it is better to sell your home and clear off the debts. This way, your credit report is unaffected.
b) Short sale: This would be a best option if the worth of your home is less than the amount you owe. Short sales too affect credit history but not to the extent foreclosure does.
c) Deed-in-lieu signing: You can deed your home to the lender. This way you can avoid or stop foreclosure; however, your credit history would be affected very badly. The effect in credit history is as equal as foreclosure when you sign a deed-in-lieu with your lender.
There is always a possibility of stopping a foreclosure; however, you should know how to stop a foreclosure.