How to Avoid Foreclosure When Already in Foreclosure
Avoiding a foreclosure after a lender begins the process isn't impossible. Foreclosures are costly to mortgage lenders. For this reason, lenders are generally eager to work out an agreement with borrowers to stop a foreclosure and potentially keep borrowers in the home. Know your options and speak with your lender promptly to stop a foreclosure.
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Request a forbearance period. If mortgage payments fall behind after a job loss and you're actively seeking new employment, explain this to your lender and ask your lender to allow a forbearance period, wherein you can stop making your payments for 90 to 180 days.
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Lower your house payment with a modification. If you're employed and have income but can't afford your present payment, discuss a loan modification to bring down your rate and monthly payment.
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Give up your house voluntarily. Rather than go through the home foreclosure, stop the process and sign over the deed to your lender. Called a deed in lieu, your mortgage lender takes back the house and you can vacate the property and walk away from the home loan. Requirements for a deed in lieu vary. Speak with your lender for qualifying information. Some lenders offer a deed for lease, which lets borrowers rent back the house after signing over the deed.
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File bankruptcy. A bankruptcy filing halts all debt collection attempts, creditor lawsuits, repossessions and home foreclosures. You may still lose your house after a judge hears your case, but bankruptcy can stall the process and possibly allow you to keep your house under a new payment plan.
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