How to Prevent Foreclosure Sales
When a homeowner defaults on a mortgage loan, the lender begins the foreclosure process. A sale date is set to auction the home off to the public. If your home goes into foreclosure, you can still prevent the sale by taking action. A variety of assistance programs are available to help you stop a foreclosure sale. The best way to stop a foreclosure is to prevent one before it happens in the first place.
Other People Are Reading
Instructions
-
-
1
Prioritize your bills. Your mortgage should be top priority. Determine which expenses you can eliminate;.for example, you may want to drop the cable for a few months to catch-up on your mortgage. If you pay credit cards, paying your mortgage instead is a wise option. Although delinquent credit cards can lower your credit score, a foreclosure has a more serious impact on your credit.
-
2
Explore options with your lender. Address the issue as soon as possible to prevent the foreclosure. While still current on the loan, refinancing can lower your payment each month. If you encounter a hardship, request a forbearance. The temporary payment suspension is ideal for homeowners who need extra time to get their finances in order. Once the forbearance period is over, you will resume paying your mortgage plus the missed payments. A loan modification is offered to homeowners who are currently delinquent. The federal Making Home Affordable program offers loan modifications allowing the loan to be reinstated.
-
-
3
Get help from a counselor. The foreclosure process is overwhelming. Obtain help by contacting a foreclosure prevention specialist approved by HUD. A counselor reviews your mortgage and finances to present you with the best solution for your situation. For some homeowners it may be a matter of budgeting, while others may need to sell the home. In addition to determining your eligibility for assistance, the counselor can guide you through the application process.
-
4
Seek alternatives to foreclosure. If you are on the verge of foreclosure, your lender might consider a short sale. In a short sale, the lender agrees to accept less than the balance owed on the loan through a sale. Another alternative to foreclosure is a deed in lieu of foreclosure. When a home is placed on the market and does not sell, lenders are sometimes willing to let you transfer ownership of the property back to them. You may even be eligible to receive relocation funds. The Home Affordable Foreclosure Alternative program provides up to $3,000 to homeowners who complete a short sale or deed in lieu of foreclosure.
-
5
File bankruptcy. Filing either Chapter 7 or Chapter 13 bankruptcy will stop the foreclosure sale. After you file bankruptcy, an automatic stay is issued. Creditors are ordered to cease collection activity, including your lender. The automatic stay remains in affect until the bankruptcy is finalized. If you would like to keep your home, Chapter 13 makes it possible. You would need to continue making your current mortgage payment. The delinquent amount is required to be repaid through an affordable payment plan. Bankruptcy will have a serious negative impact on your credit score for at least seven years.
-
1
