Ways Of Stopping Foreclosure Process

Most homeowners never ever thought of foreclosing on their home when they first purchased their home.  Unfortunately, extenuating circumstances do happen in people’s lives that the possibility of foreclosure happen.  Many homeowners lost their jobs, businesses, or had other financial crisis happen during and after the real estate crisis of 2008 where they can no longer afford to pay for their monthly mortgage payments and are still facing foreclosure.  There are thousands of hard working Americans who lost a good paying job and are working full time for a fraction of what they used to make and are underemployed.  Many college educated engineers are working as technicians, managers are working as clerks, police officers are working as security guards, and the list goes on and on.

Situations Where Homeowners Go Into Foreclosure

There are hundreds of examples where homeowners face pending foreclosure.  Some of the common situations are when a homeowner loses his or her business or job or a demotion from their current job.  Many employers have made full timers into part timers too due to the Great Recession.   Unexpected prolonged illness is another common reason where they are hospitalized and cannot work due to their medical situation or illness.  Other cases is when the working spouse dies and the household cannot afford to make the monthly housing payment due to the drop of income or no income.  Divorce is another common reason where homeowners not just face foreclosure but also are forced into bankruptcy.  Excessive credit obligations and unexpected major housing repairs can set any homeowner back and make them fall behind on their mortgage payment as well.

Avoiding Foreclosure: Certain Ways To Avoid Foreclosure

Mortgage lenders do not want to be property owners and the last thing they want is your home.  They will work with you to avoid foreclosure and many mortgage lenders have a work out department where they have representative specifically assigned to work with homeowners in distress.  The first thing you should do if you anticipate future problems in paying your mortgage payments is contact your mortgage lender before you fall behind.  If you are current on your mortgage payments but anticipate hardship in the near future, your mortgage lender is more likely to work with you while your are current with your mortgage payment.   If you have a temporary situation where you just got laid off and can find employment in a month or two, a mortgage lender might offer you a short term forbearance agreement where they can give you a three to six month reprieve and give you a repayment plan or add the arrearage to the back of your mortgage loan.  In the event if you have plenty of equity in your home, your mortgage lender might offer to add the missed payments to the balance of your mortgage loan.  A loan modification is where a mortgage lender will restructure your current loan where they can structure it by forgiving some of the balance owed or lower your mortgage rate to reduce your monthly mortgage payment so it can be an affordable payment.  This normally happens when you are upside down on your home where your mortgage balance is higher than the value of your home.  The mortgage lender can also do a partial claim and make a separate note to you like a second mortgage to make the missed back mortgage payment.  You, as a homeowner, will have options if you contact your mortgage lender early enough.

Avoiding Foreclosure: Advice On Stopping Your Pending Foreclosure By Your Mortgage Lender

If you do not contact your mortgage lender and avoid talking to them hoping that your financial situation will get better, it might be too late for you to avoid foreclosure.  If your mortgage lender does file a notice of default, it might be too late to stop foreclosure.  Most mortgage lenders are reluctant to work with a homeowner who is in default and well into the foreclosure process because their options may be limited.

Alternatives To Foreclosure: Sell, Short Sale, Deed In Lieu

A homeowner facing foreclosure should not procrastinate and act on ways of avoiding foreclosure, whether it is contacting their mortgage lender or trying to sell their home.  Contact a realtor in your area and see if you can get a market analysis and see if you can sell your home.  If your home is upside down where you owe more on your mortgage balance than the value of the property, see if your mortgage lender is willing to accept a short sale, permission for you to sell your home below the price of what you owe on the mortgage balance.  Another alternative to foreclosure is a deed in lieu of foreclosure where the mortgage lender is willing to accept the keys of your home and avoid a deficiency judgment in lieu of foreclosure.

The information contained on Gustan Cho Associates website is for informational purposes only and is not an advertisement for products offered by The Gustan Cho Team @ Gustan Cho Associates or its affiliates. The views and opinions expressed herein are those of the author and/or guest writers of Gustan Cho Associates Mortgage & Real Estate Information Resource Center website and do not reflect the policy of Gustan Cho Associates Lenders Network, its officers, subsidiaries, parent, or affiliates.

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