How to Slow Down a Foreclosure Under a Deed of Trust
A foreclosure is a homeowner's worst nightmare. Many consumers who have homes saved for years to afford a down payment, and the prospect of losing the house they turned into a home is terrifying and sad. Foreclosures under the Deed of Trust system are even more disheartening. In these circumstances, the lender needs no court approval to auction the property--meaning that as soon as the state allows for a sale, a homeowner can be evicted. However, there are techniques for stalling the foreclosure.
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Things You'll Need
- Existing mortgage paperwork
- Copies of bank statements
- Lender contact information
Instructions
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Contact your lender to inquire about repayment options. Do this first and as soon as you've fallen behind. In some state--like Texas--a lender can foreclose only 21 days after you've defaulted. The earlier you begin making arrangements, the better your chances of avoiding foreclosure will be. Find out about modification options and hardship programs. Remember that a lender usually doesn't want to foreclose, either.
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Request the original mortgage note. This is simply a stalling tactic that may or may not buy you time. In the late '90s, lenders began selling off their mortgage portfolios to investment banks. Mortgages started getting shifted from bank to bank. It may take the current mortgage holder some time to actually find the original mortgage note.
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File for bankruptcy. This will immediately halt the foreclosure proceeding. This should be a last resort, though. Bankruptcy will hurt your credit as much if not more than a foreclosure. In addition, there's no guarantee that you'll be able to keep your home in a bankruptcy--even in a Chapter 13 filing (where your debts are restructured and put on a payment plan, not eliminated). And, once you exit bankruptcy, the lender can come after your mortgage loan again.
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Hire an attorney and file a suit against the lender. While your suit may not hold water, and you may lose money in legal fees, tying up a lender in court will stall the foreclosure process.
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Acquire a "hard money" loan. These loans are financed by private investors. They often come with highly unfavorable fees and interest rates. This is also a risky move as, down the line, you will likely be faced with payment difficulties on the hard money loan as well as the mortgage.
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