How to Delay the Foreclosure Process

Save your home with special foreclosure prevention programs.

If you're struggling to make your mortgage payment, you aren't alone. According to the Federal Trade Commission (FTC), approximately 250,000 U.S. homeowners are entering foreclosure every 90 days. There are special programs available to assist homeowners in delaying the foreclosure process and getting current on a mortgage. Homeowners need to partner with lenders to get access to these programs and move the loan out of default status.

Instructions

1. Request a loan modification on your loan. Financial institutions offer loan modifications to families struggling financially. Qualify by having debt obligations of 55 percent or higher of monthly income, according to CNN Money.

2. Request a catch up plan with the lender. Getting behind on mortgage payments can add up to thousands of dollars. Creating a catch up plan with the lender allows you to make small payments each month to catch up on the mortgage. This will move your loan out of default status.

3. Get approved for loan forbearance. This program is reserved for people struggling with job loss or serious medical illness. If approved, forbearance will allow you to stop making mortgage payments without going into foreclosure.

4. Apply to special programs. Fannie Mae loans have access to special foreclosure prevention programs, such as the HomeSaver Advance Program. Contact your lender and ask if the loan is secured by Fannie Mae. If approved for the program, you will receive a personal loan that catches you up on missed payments.

5. Refinance the loan. If you don't qualify for special programs, ask your lender about a refinance. If you have equity in the home, you may be able to use the equity to pay back late payments. Lower interest rates will reduce monthly payments, which will make the loan more affordable. A longer loan term is another option for lowering monthly payments.

Tips & Warnings

• Once a forbearance period has expired, you will need to resume normal monthly payments. A small additional amount needs to be paid monthly to catch up on the missed payments.

• If you can't afford your home any longer, arrange a pre-foreclosure (short) sale. This type of sale is arranged with the lender, allowing you to sell the home for less than the home's worth. For example, if you owe $400,000 on a home, but the market value is $300,000, the lender will accept $300,000 and write off the difference.

References

• CNN Money: Mortgage Help: Do you Qualify
• Fannie Mae: Avoid Foreclosure
• FDIC: Statistics on Foreclosure