How to Stop the Foreclosure and Sheriff Sale of Your Home

Foreclosures are a fact of life. At one time or another in any person’s life there can be a time of when expenses exceed income and if you don't have savings, there is a chance of losing your home. Many people recoil in shame and embarrassment when it comes to being threatened with foreclosure. If you stand up to the bank and deal with them maturely and responsibly, you can stop foreclosure and sheriff sale of your home.

Instructions

1. Answer phone calls from your lender and read every letter they send. It might be easier and minimize stress for a while to ignore calls and mail, but doing so will make then think that you have given up on keeping the home and have no intention to pay or work with them.

2. Call your bank as soon as you know you have a problem and request your bank make a reasonable agreement with you that will allow you to get your mortgage back on good terms. You can request a forbearance, which means giving you time to work out a payment plan. You can request that they let you spread out missed payments over time until you are caught up. You can request the bank change the terms of your loan by lowering interest rates or extending the amortization period. Whatever you decide to ask your bank for, just be sure it is something you can deliver.

3. Be aware that if you decide to act too late, after your lender files a notice of default, there are still some actions you can take. You must be proactive and call your lender to try to work out an agreement with them. Of course, if they have already started foreclosure proceedings, you my have to insist on speaking to a number of people until you get someone willing to work with you. Do not be afraid to ask for a supervisor or manager. Be aware that they will be more aggressive in the amount of money they request for you to stop the foreclosure.

4. Know that if your home is in danger of foreclosure, you will also notice letters from organizations that are offering to help you work out an arrangement with your bank. These organizations are paid by the bank for mortgages that they save. They will work aggressively to stop your foreclosure and are very successful. Contact these companies and decide which one you want to work with based on the kind of arrangement they think they can make for you. If in doubt about any mortgage-help agency, contact the Better Business Bureau to learn about their reputation. Also, never pay anyone to help you fix your mortgage problems.

5. Know that if you have received a notice of sheriff sale, you must pay the past due amount or talk the lender into halting the sale by making an aggressive payment arrangement. You need to call the lender's attorney to request postponement of the auction so that you can arrange to catch up the past due amount. You can also try contacting the Sheriff's Department to try to get the auction date postponed.

6. Sell your home first as a last resort. If you cannot and know you will not be able to pay for your home, contact your bank to let them know that the home is up for sale and request time to sell it. After the house has been on the market for several months, consider a short sale in which the bank agrees to accept less money than you owe them. If the house will not sell, you may want to sign a Deed-in-Lieu of Foreclosure meaning you sign the home over to the lender to avoid foreclosure. If signing a Deed-in-Lieu of foreclosure, be sure to request the bank not report it as a foreclosure. The purpose of turning the house over to the bank is to lessen the hit on your credit report.

Tips & Warnings

• Call your bank, don't wait for them to call you.

• Do not ignore calls and letters from your bank. It will only make matters worse.

Resources

• Read this Article in Spanish