Facing Foreclosure


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Stop A Foreclosure Sale And Keep Your Home

One of the most difficult situations for a homeowner to face is a possible foreclosure. After all our homes are our places of refuge, and the thought of them being taken away is not pleasant. However, if you find yourself in a situation where foreclosure is a very real possibility, you should know that there are a number of steps you can take to stop foreclosure and keep possession of your home.

Your first decision should be whether it's truly feasible for you to keep your home. Generally, if you've suffered a temporary financial setback that has since been alleviated, and your monthly house payment (including taxes and insurance) is less than 40% of your gross monthly income, there is no reason why you shouldn't be able to keep your home. However, if the payment is more than 40% of your monthly income, then you should seriously consider selling your home in order to avoid additional damage to your credit report.

If you've decided that you're going to try to keep the house, you have several options.

Negotiate With Your Lender

The first option to do to stop foreclosure is to be up front and honest with your lender. You should always be to attempt to negotiate with your current lender. Many people think that the bank enjoys repossessing homes, but this couldn't be further than the truth. Their aim is to keep payments current, not take away your house because banks are losing money if they take back your homes. Therefore, banks usually have special financial assistance programs available that you can take advantage of to stop foreclosure.

If you believe that you can make up defaulted payments over a number of months, and your history with the lender up to this point is good, they'll often be willing to rewrite the note or arrange a payment plan or even allow you to make double payments in order to get caught up. However, you'll need to present the reason that you were in default, and a plan for repayment that can be backed up with proof of change in circumstances for a lender to be receptive. Even if you're fairly sure that the lender will not be receptive, you should still make the attempt.

Refinance Your Home Loan

The second option is to refinance your home loan. With the interest rates at all-time low now, you might want to refinance your home loan if you bought your home when the interest rates were higher. With lower interest rate, you will be able to reduce your monthly payment and eliminate your problems. If refinancing through your original lender isn't a possibility, you still may be able to stop foreclosure on your home by refinancing through another lender. Generally, a lender will require that the total of all loans against your home must be less than 75% of your home's current market value. The more equity you have in your home, the more likely it is that you've be able to refinance and bring your loan current. Find the best interest rates and refinance now!

If you can't negotiate on your own, there are several non-profit groups who can help negotiate with your creditors, including your home mortgage holder, and work out a payment plan for you. Credit repair organizations are a viable alternative to declaring bankruptcy. Bankruptcy should be your last resort. If you have no other options available, and a foreclosure sale is imminent, declaring bankruptcy under Chapter 13 can allow you to repay all outstanding debts over a period of 3 to 5 years, while keeping your assets.

Overall, it is possible to stop foreclosure. The most important thing is to communicate with your lender if you have a problem with your house payment. You will be able to work out a solution with them before it gets too late. Alternatively, you can consider refinancing your home loan so that you are able to bring your loan current.

No one wants to face foreclosure, but if you find yourself in this position, it will help you if you are aware of services available that you can take to stop foreclosure and keep your home now.

Facing Foreclosure



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