Different Options Available To Avoid or Stop Foreclosure

Pamela had an excellent job and a great house with comfortable monthly mortgage payments, which she was able to make promptly. Then came trouble in a deluge. She had an accident, forcing her to quit her job temporarily to get proper treatment. Soon, with little money coming in, all her savings were fast dwindling. She was having trouble repaying the mortgage. She could not work because of extensive and expensive surgery and recuperation. Their came a day when the mortgage financier asked her to consider other options or face a foreclosure because her dues were soon outstanding. Things can take an unexpected change, for there had been a time when she had a good-quality life and now she faced losing her home, of which she had been so proud. She wanted to save her house at any cost from a foreclosure and decided to look up other options available to stop foreclosure. She made an appointment with her lender and explained her situation, pointing out her good record prior to hospitalization, explained her financial situation and the assurance of getting her old job back after treatment, and assured them that she would repay them without fail. They agreed to a forbearance option and, as she kept her word, her loan was reinstated and she succeeded in using available options to avoid foreclosure. Thus, she successfully took positive action to avoid foreclosure and losing her home. Homeowners facing foreclosure need to be aware that they have different options that can remedy the situation and help them stop foreclosure proceedings.

Options Available To Avoid Foreclosure
There are several options that can be utilized to stop foreclosure proceedings. This will require honest dealings with the mortgage financiers and explaining in detail your fiscal situation, proof of current financial situation, monthly expenditures incurred, and how you propose to make a change. Some people get into the habit of avoiding calls and dealing with financiers, unwittingly tightening the noose, so to speak. Rather, you will indeed make better progress if you can deal in a direct fashion with your lenders. After all, they are humans too; and if situation and circumstances permit, you could get a reprieve and could get valuable time to repay the loan and avoid foreclosure. 

Reinstatement: Homeowners can negotiate and promise to repay a considerable amount of money within a specific date to make up the arrears and become current in your payments.

Forbearance: Lenders agree to a delay in payments on the condition that other options such as reinstatement may be used to make the repayment current. Paul had $40,000 in default. He worked out a forbearance agreement with the bank, agreeing to pay an initial lump sum of $20,000 and repaying the remaining by double monthly payments till the loan was current.

Refinancing: Some people opt to refinance their loans. It is highly unlikely when the loan is in default, but some homeowners do try this option. 

Mortgage restructuring: At times, homeowners who defaulted can make current monthly payments but not make up for the arrears. In such cases, the mortgage could be restructured with the dues being added to the loan, extending the affordable monthly payment till the loan is paid in full including the arrears.
In certain other cases, the homeowners are unable to make the current monthly payments and they can request the monthly repayment to be restructured by lessening the monthly repayment amount and extending the duration of the loan.

Selling The House/ Handing The Deed In Exchange For Writing Off The Loan: This option is not much welcome as they do not want to lose their homes; but in the event that a foreclosure is unavoidable, then they prefer not to face the humiliating foreclosure so ask for some time to be able to quickly sell their houses and make up the dues or in other cases offer their title deeds in exchange for having the creditors write off the loan.

Filing For Bankruptcy: This option is used by some but not recommended because it can stop foreclosure proceedings temporarily but not permanently. You could end up facing both foreclosure as well as bankruptcy!

Getting A Hard Money Loan: Another option used that can temporarily stop foreclosure but in the long run another disaster waiting to happen.

Getting FHA Or VA Loans: the lenders may help you get a one-time FHA loan or a VA loan to help avoid foreclosure. The loans are interest-free and have to be repaid when the mortgage is paid off or when the property is sold.

Getting into a bad debt situation is eas

 

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