How To Stop Foreclosure On Your House
If you fall on hard times, the threat of foreclosure can easily happen when you are no longer able to make the mortgage payment. You may feel helpless when it comes to foreclosure happening, but there are actually a few things that you can do to stop it. Work with an attorney to do these 3 things.
Foreclosures are not just a problem for a homeowner, but the mortgage company as well. They must go through a ton of court proceedings and paperwork, all of which will cost money to do. This is why a mortgage company may be willing to compromise and come to an amicable agreement with you before using foreclosure. It's called mortgage modification, and it can include reducing mortgage payments by reducing the interest rate. Do not expect the remaining principal left to pay on the home to be reduced though.
If the hardships you have run into are not temporary, you must consider bankruptcy as an option for keeping your house. Once a bankruptcy petition has been officially filed, creditors cannot continue with making collections, which can include collections related to your house.
Understand that submitting the bankruptcy petition does not automatically mean you'll be approved for your bankruptcy, and a bankruptcy approval won't get you out of paying the remainder of your mortgage if you plan to keep your home.
When you are out of options, a short sale may be your best way to prevent foreclosure from happening. A short sale is when you need to sell the home since you cannot make payments on it anymore, but the amount that you'll receive for the home is less than what you still owe on the property. The mortgage lender must agree to the short sale, and it's possible to be released from any obligations from the remainder of the debt that is owed.
Though you will still lose the home, there are benefits that make short sales better than foreclosures. The effect on your credit score will not be as bad, with a reduction of 50-150 points instead of 200-400. A short sale will also result in not having the restriction of being unable to buy another home in the future, which is usually between 5-7 years with a foreclosure.
If you need help battling a potential foreclosure, work with an attorney in your area. They can help negotiate a mortgage modification with your lender, walk you through a bankruptcy filing, or assist in the paperwork of having a short sale.
Contact a law firm like Brandt Law Group for more information.