Afraid You May Lose Your Home to Foreclosure?

If you are afraid you might lose your home due to bank foreclosure, here are some possible alternatives.

  1. Reinstatement—repayment of all missed payments and fees
  2. Forbearance or repayment plan—income documentation usually required
  3. Sell the property—be sure you can sell for at least as much as you owe or are able to pay the difference.
  4. Rent the property—usually a short term solution
  5. Refinance—may be a short term solution
  6. Mortgage Modification
  7. Deed in Lieu of Foreclosure—property can only have one mortgage and no liens
  8. Bankruptcy—usually can keep the home, but you must be able to continue payments. Damage to credit.
  9. Service Members Civil Relief Act—available only to active service members
  10. Short Sale—When you owe more on a property that it is currently worth and the other solutions do not apply. The lender may allow you to sell the property for less than is owed and the lender accepts an amount less than the mortgage balance. This can be a win-win-win solution. The lender does not have to proceed with an expensive foreclosure process. The seller does not have to file bankruptcy or have a foreclosure on credit records. The new buyer gets a property for a lower price than normal.

The idea of losing your home is scary and even embarrassing, but do not avoid addressing the issue. Contact your lender. Discuss all your options with them; most lenders will not suggest the option of a Deed in Lieu of Foreclosure or Short Sale. You will have to bring up appropriate alternatives to your lender and be proactive to make the best of a difficult situation.

Know what caused the crisis. Are you current on other bills? Did your adjustable rate mortgage payment increase too much? Have you suffered a permanent or temporary loss of income? Answers to these questions will help determine what solution is best for you.

If you have questions about these or any other possible options to avoid foreclosure, please feel free to contact me. I have experience in many distressed transactions and have access to resources to help distressed homeowners.