How to Avoid a Foreclosure After a Notice of Default
Even though the number of foreclosed homes in the United States is starting to decline, you may be unable to make monthly mortgage payments on your home. After a Notice of Default has been filed, you will have about one month to bring the mortgage up-to-date. Contacting your lender before a Notice of Default has been issued is the best way to prevent foreclosure. But if this notice has been filed, you can still contact your lender to negotiate new repayment terms to save your home or sell your home to prevent a foreclosure statement on your credit report.
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Instructions
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How to Avoid a Foreclosure After a Notice of Default
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Determine how much you owe your lender in missed mortgage payments and late fees. After a Notice of Default has been filed with the county clerk's office, you will have 20 to 30 days to repay what you owe before the home will be auctioned. This time frame varies from state to state.
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Bring your mortgage up-to-date by repaying missed payments and fees in the time allotted to avoid foreclosure.
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Contact your lender and negotiate new repayment terms if you cannot repay what is owed.
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Put your home on the market and hire a real estate agent. Depending on the number of homes for sale in your area, the current real estate market, your asking price, and the connections your real estate agent has, your home could sell quickly enough to prevent foreclosure.
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Consider selling your home in a short sale. A short sale means your home will be sold for the amount equal to or less than the current mortgage loan. This is usually less than what the home is actually worth. Contact a real estate agent who specializes in selling homes in short sales.
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Tips & Warnings
Contact your lender before missing a mortgage payment to negotiate new payment terms. Lenders are more willing to work with homeowners before issuing a Notice of Default.
A Notice of Default is issued after three months of missed mortgage payments. Your lender will send a letter to you after one mortgage payment is missed.
Never send money to credit counseling or foreclosure specialists who claim they can prevent foreclosure on your home.
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- Photo Credit Benjamin Earwicker
