How to Stop Foreclosure Information
Stopping foreclosure is well within the abilities of most individuals and families, as long as actions are taken quickly. Lenders lose substantial amounts of money every time they enter the foreclosure process. In the majority of cases, it's worth more to the lender to come to an agreement about the mortgage before completing the foreclosure process. Use this to your advantage and negotiate an agreement to stop foreclosure before it happens. There are two primary strategies for preventing foreclosure: selling the house and negotiating a new payment plan.
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Instructions
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Selling a Home in Foreclosure
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Review the current status of your mortgage, including equity and how much you owe in late payments, penalties and interest. You will have to repay the mortgage and all penalties to halt the foreclosure process. If you have low amounts of home equity, you may not be able to cover the cost of the foreclosure with only the home sale. Despite this, it can halt the foreclosure process and allow you to keep your finances intact.
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Contact your lender and inform your loan officer about your intention to sell the home before the foreclosure process is completed. The company may be willing to grant you a grace period on the foreclosure while you attempt to sell the property, if you keep the lender updated about the status of your search for a buyer.
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Contact real estate brokers or advertise your home sale in local publications. You are not legally obligated to inform anyone that the home is in foreclosure, but you may wish to tell your broker so that they place a high time priority on selling the house. Once the house is sold, you'll be able to discharge all or at least a portion of your obligation to the mortgage lender and halt the foreclosure process. Using this method, you will be able to make use of your home equity, as the lender seizes all equity on the home if the foreclosure process is complete.
Negotiating an Agreement
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Apply for foreclosure forbearance from your lender. Foreclosure forbearance is a temporary stay in the mortgage obligation. To qualify for forbearance, you must have experienced a significant financial catastrophe that caused a temporary inability to make mortgage payments. This includes job loss, major property loss, death in the family, disability, injury or illness. You must also be able to demonstrate that the condition is temporary. You will need to write an extended letter explaining what caused the financial difficulties and how you intend to repair the situation.
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Negotiate a new mortgage agreement with the lender that will fit your financial obligations. You may be able to convince the lender to reduce your mortgage balance, your interest rate and your monthly payments.
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Follow the new terms established with your lender to stop the foreclosure process.
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