HOW TO AVOID AND STOP FORECLOSURE

It can be financially and emotionally painful to lose your home to foreclosure.

9/21/20222 min read

HOW TO AVOID AND STOP FORECLOSURE

It can be financially and emotionally painful to lose your home to foreclosure. No matter what stage of the process you are in and despite how bleak it may feel when you are behind on payments, there are solutions to stop foreclosure.

However, there are solutions that can be used to prevent a foreclosure. You might be eligible for a loan modification, forbearance, or repayment agreement if you wish to keep your house. You may also be able to complete a short sale or deed in lieu of foreclosure if you'd prefer to leave the property without having to go through a foreclosure.

WHAT IS FORECLOSURE

Foreclosure is when the lender that holds your mortgage takes your house back, usually because you haven’t made a mortgage payment for three or more months. There are steps a lender is required to take before a foreclosure is final, and you will be notified each step of the way.

HOW TO AVOID AND STOP FORECLOSURE

Here are some of the most frequent ways of addressing unpaid mortgages. In some cases, the resolution may involve using two or more of these tools together.

FOREBEARANCE

Mortgage payment forbearance refers to a brief reduction or suspension. While not necessarily resolving any delinquencies, this option provides you some time to rectify the problems that led to your inability to make payments.

But if the delinquency is not handled, you can find yourself with a balance once the forbearance period is through. You must set up a payment schedule to make up missed payments until you are caught up in order to settle your post-forbearance balance. It's critical to understand your options and rights following forbearance.

LOAN MODIFICATION

Any alteration to your mortgage loan that permits you to make up missing payments using a variety of methods is known as a modification. In a normal mortgage modification, the payment terms are lengthened, the interest rate is lowered, and any outstanding balances are added back to the loan's principal sum.

Before considering this option, you must weigh the obvious advantages and disadvantages of a mortgage modification. For instance, a mortgage modification may result in lower monthly mortgage payments, but it may also result in a rise in your loan's principal balance. As a result, your loan's interest rate can increase.

REPAYMENT PLAN

Lenders occasionally agree to put up a repayment plan so you can make up your delinquent balances over a longer period of time. Although it is a less frequent alternative, certain lenders and mortgage servicers provide it.

DEBT FORGIVENESS

A lender may occasionally, but not frequently, agree to waive a payment to bring you current on your loan. Debt forgiveness is the phrase used to describe this activity. Any debt forgiveness often occurs after you have built a solid payment history on a loan modification. But any debt forgiveness is typically up to your lender's discretion, so be sure to read all the fine language before making any claims of forgiveness.

REFINANCING

If you own your property with enough equity, the lender can agree to a refinance that raises the loan balance to reimburse for missed payments and re-amortizes the loan over the payback period. You might be shocked to learn that you can refinance the loan with a third party, depending on the degree of delinquency.

SELL YOUR HOME

One approach to get rid of mortgage issues is to sell your house on your own. Short sales, which involve selling a property for less than it is worth and require the lender's consent, may be an option if the value of your home is less than the amount you owe on your loan.

NB: This article is not a legal advice, and under no circumstance should you take it as such. All information provided are for general purpose only. For information, please contact chamanlawfirm@gmail.com

WRITTEN BY CHAMAN LAW FIRM TEAM

EMAIL: chamanlawfirm@gmail.com

TEL: 08065553671, 08024230080