How to Stop Foreclosure Now

Member

By magnadea
User-Submitted Article

Article Rating:

(6 Ratings)

Stop Foreclosure Now

Facing the foreclosure of your home by your mortgage lender is one of the most stressful, frightening, and often avoidable events in your life. Sometime there is no doubt that for whatever reason you cannot afford the home you have purchased, and foreclosure is almost inevitable. Other times, if you are experiencing a short term job loss or health problem, your ability to pay your mortgage may be temporarily effected. This article is written in an effort to offer you some permanent and temporary ways to stop foreclosure actions.

Difficulty: Moderate

Instructions

Things You'll Need:

Access to a computer
The contact information for your mortgage lender or mortgage servicing company
Your mortgage loan account number

Step 1

Before you reach the point where you stop making your mortgage payments, consider finding other sources of money to make them with. If your situation is temporary, do you have friends or family that can help you out for a while? Do you have a car that you make payments on? You can sell it and use the money that went toward your car payments to pay toward your mortgage. Would you rather lose your car or your home? You can also sell other assets that you may have. As last resort, take cash advances from your credit cards. It is better to owe a nonsecured debts than a secured debt. Again, only do this if the situation is temporary.
Step 2

Talk to your lender. If you situation is temporary try to negotiate a lower payment for a planned period of time. If it isn't temporary, try to negotiate a lower interest rate, longer pay back period, or a refinance at the market value of the house today. These days many lenders would rather get some money, then none. If you will not be able to keep your house because your under water on your mortgage and the payment will be impossible to pay, try to negotiate an agreement for a short sale of your home, where the lender agrees to take whatever you can get for the sale of your home as payment in full of your debt. You can also ask for the lender to agree to a deed in lieu of foreclosure.
Step 3

Try to sell your house fast by selling it below market value. This will only work if you have enough equity in your house. Otherwise, you will have to bring money to the closing.
Step 4

There are two actions that will quickly, but temporarily, stop a foreclosure.

* A RESPA letter - This letter is also referred to as a "Qualified Written Request, Dispute of Debt, Validation of Debt, TILA letter." The RESPA letter is a specific demand from the borrower to the mortgage lender or mortgage servicing company to produce evidence of the validity of the debt, and is very detailed and specific. Under the Real Estate Settlement Procedures Act (RESPA), the Truth In Lending Act (TILA), Regulation X, and the Gramm Leach Belley Act, the lender must acknowledge the receipt of the letter within 20 days, and must correct or provide clarification regarding the disputed debt, within 60 days of receiving the letter from the consumer. During the 60 days, the mortgage lender may not report any overdue payment amounts to consumer reporting agencies.
* File bankruptcy under Chapter 13 - This form of bankruptcy is often referred to as the wage earners bankruptcy as it does not discharge the debts of the consumer, but does allow the consumer time to make a plan to pay back creditors. The catch here is that you must be able to make your current mortgage payments. All actions by creditors, including foreclosures, must be stopped until you come out of bankruptcy. This gives you time to get back on your feet from a temporary set back.

Comments

michellerose said

Flag This Comment

on 8/5/2009 we did a loan modification and thought every thing was all good but nope i got the letter in the mail they are forclosing on us in 25 days ????????????? what do we do now??????