Foreclosure is an increasing crisis, with more homeowners coping with foreclosure every year. Statistics show that in the first quarter of 2008, a nationwide average of one out of 194 households was in foreclosure. Foreclosure is a tough experience for everyone involved. All you want to do is stop the foreclosure sale and keep your house. Still, the phone calls and letters begin to come leaving you to stress and worry about what you can do.
It's not a hopeless situation. Throughout the foreclosure process you have options to avoid foreclosure. Knowing your options and taking fast action are two of the most critical things to keep in mind. If you can reach an agreement with with your lender before they file for a "Notice of Default" then you could avoid the foreclosure process in the first place.
The amount of time you still have to stop foreclosure depends on your situation. If you already received a notice of foreclosure sale, there are very few options to choose from. What is left to decide between are options such as bankruptcy which each come with their own set of drawbacks.
Here's some common ways homeowners avoid foreclosure:
Foreclosure Arrangements with the Mortgage Lender
The best way to prevent foreclosure altogether is to negotiate with your lender directly for a common solution. A few common resolutions include repayment plans, loan modifications and short sales. To figure out if this is the right solution for your situation, you must talk to the mortgage lender. Foreclosure specialists are also helpful if you'd rather leave the discussions to the professionals.
Bankruptcy
Bankruptcy is usually a last effort, not a choice you would make because of the foreclosure alone. If you have other debt problems and little to no income, however a bankruptcy can be the right answer for you. There are two types of bankruptcy - a chapter 7 and a chapter 13. A chapter 7 is a temporary solution but will halt the foreclosure until the lender is granted the permission of the bankruptcy court. A chapter 13 is designed to payback your creditors by establishing a court structured repayment plan. Your home loan can be one of the debts considered for a payment plan, only if both sides agree or the court decides. Do know that delcaring bankruptcy can have serious consequences for you in the long term.
What About a Refinance?
Depending on your income, credit, and the equity in your property it might be possible to locate a lender who could refinance your full loan. If this were the case, you could payoff the foreclosing lender and avoid foreclosure. You will have to pay all of the fees and penalties. Many homeowners opt for a refinance loan, but they are only for situations when you have enough equity in the property.
Deed in Lieu of Foreclosure
If you are in a situation where you can not continue to afford your home, you might be thinking about a "Deed in Lieu of Foreclosure". A deed in lieu of foreclosure is literally giving the house to the bank. Although you lose the home, you can avoid a stressful foreclosure that ends the same way.
It's not a hopeless situation. Throughout the foreclosure process you have options to avoid foreclosure. Knowing your options and taking fast action are two of the most critical things to keep in mind. If you can reach an agreement with with your lender before they file for a "Notice of Default" then you could avoid the foreclosure process in the first place.
The amount of time you still have to stop foreclosure depends on your situation. If you already received a notice of foreclosure sale, there are very few options to choose from. What is left to decide between are options such as bankruptcy which each come with their own set of drawbacks.
Here's some common ways homeowners avoid foreclosure:
Foreclosure Arrangements with the Mortgage Lender
The best way to prevent foreclosure altogether is to negotiate with your lender directly for a common solution. A few common resolutions include repayment plans, loan modifications and short sales. To figure out if this is the right solution for your situation, you must talk to the mortgage lender. Foreclosure specialists are also helpful if you'd rather leave the discussions to the professionals.
Bankruptcy
Bankruptcy is usually a last effort, not a choice you would make because of the foreclosure alone. If you have other debt problems and little to no income, however a bankruptcy can be the right answer for you. There are two types of bankruptcy - a chapter 7 and a chapter 13. A chapter 7 is a temporary solution but will halt the foreclosure until the lender is granted the permission of the bankruptcy court. A chapter 13 is designed to payback your creditors by establishing a court structured repayment plan. Your home loan can be one of the debts considered for a payment plan, only if both sides agree or the court decides. Do know that delcaring bankruptcy can have serious consequences for you in the long term.
What About a Refinance?
Depending on your income, credit, and the equity in your property it might be possible to locate a lender who could refinance your full loan. If this were the case, you could payoff the foreclosing lender and avoid foreclosure. You will have to pay all of the fees and penalties. Many homeowners opt for a refinance loan, but they are only for situations when you have enough equity in the property.
Deed in Lieu of Foreclosure
If you are in a situation where you can not continue to afford your home, you might be thinking about a "Deed in Lieu of Foreclosure". A deed in lieu of foreclosure is literally giving the house to the bank. Although you lose the home, you can avoid a stressful foreclosure that ends the same way.
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