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Step 1
Contact your lender. Attempt to negotiate for a temporary hold on your monthly mortgage payments. If you inform your lender that you are trying to do everything you can to reorganize your finances and begin to repay your mortgage, the lender might give you some time to do so. This is also referred to as forbearance.
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Step 2
Ask for a reduction in your monthly mortgage payments if the lender won't put a temporary hold on your mortgage payments. Make sure that you will be able to pay these payments before agreeing to them or you will be facing foreclosure again in a few months. This is also referred to as a mortgage modification and usually involves adding additional years to the mortgage term.
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Step 3
Ask your lender if you can have a refinanced mortgage that provides affordable payments for you so you can make your payments. This might involve getting a longer loan term so that the payments will be considerably smaller and affordable.
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Step 4
Attempt a short sale. Put your home up for sale and sell it for less than what it is worth in order to get the cash that you need to satisfy your loan quickly. You will lose possession of your home, but you will avoid immediate foreclosure.
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Step 5
Offer the lender a deed-in-lieu of foreclosure if nothing else can be done. This will not save your home for you, but it will save your credit from the long-lasting negative effect that a foreclosure has. A deed-in-lieu of foreclosure involves the turning over of the deed to your home and in exchange the lender releases you from your obligation.
Comments
waytoshortsale said
on 3/25/2009 check out www.WayToShortSale.com. They've written a great guide to the short sale process, written for the average homeowner (not in jargon for real estate pros and industry insiders). It's got lots of practical tips that go beyond what your realtor will tell you.