How to 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 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.
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Things You'll Need
- Access to a computer
- The contact information for your mortgage lender or mortgage servicing company
- Your mortgage loan account number
Instructions
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Consider finding other sources of money to make mortgage payments with. You can sell assets that you may have. As last resort, take cash advances from your credit cards. It is better to owe an unsecured debt than a secured debt.
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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. If you will not be able to keep your house 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.
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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.
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Write 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, the Truth In Lending Act, 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. During the 60 days, the mortgage lender may not report any overdue payment amounts to consumer reporting agencies.
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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.
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Tips & Warnings
You can find samples of RESPA letters online. Just type "RESPA letter" into your search engine. Keep a copy of the letter and send it certified mail with return receipt so you have a record of when the lender received it.
Do not ignore your lender or avoid contact with them. If you do, they will interpret this, along with nonpayment, as evidence of your default on the loan.
