Stop Foreclosure - 8 Steps to Avoid Losing Your Home

by: Leslie Collins - 1/2007
Borrowers and home owners - if you are on the brink of missing monthly mortgage payments due to financial set-backs be advised, there are options that may very well stop foreclosure, save your home and help your family maintain the stability it needs. Here are some suggestions that have kept borrowers from losing their homes.

Stop Foreclosure Resource

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1.Contact your lender

Foreclosure Links Stop foreclosure - 8 steps Stop Foreclosure - resources Foreclosure Retention Options Make sure you contact your lender when you sense you can't make your monthly mortgage payment. It's critical! Lenders are not fond of loan default and will usually work hard to help you stop foreclosure. Especially now with the massive amount of loan foreclosures in the subprime market being reported, more government regulations aimed at lenders are sure to come, creating stricter rules and guidlines for granting loans.

2. Speak to the Loss Mitigation Dept of Your Lender

They specialize in helping you with options that can stop foreclosure. They speacialize in counseling frazzeled, finacially strapped homeowners. All the experts concur, for example, that speaking with the collections dept ( where you'll probably be directed if you aren't careful) is a big mistake as they can't help you with the complexities of avoiding foreclosure.

3. Ask for Forbearance

This is a temporary and widely used strategy to stop foreclosure. The lender simply allows the borrower to skip some payments for a specific time frame, 1 -4 months usually. You're a good candidate for forbearance if you've had a sudden emergency that has negatively impacted your monthly cash flow such as job layoff, spouse tempoarliy not working, medical bills etc.. If you can show that your income and cash flow will resume to normal you'll be a better canidate for forbearance.

4. Request a Reinstatement

Lenders may agree to let you bring your amount current with a large lump sum at a specific date in the future. You'll need some kind of proof that you can actually come up with the funds, however.

5. Request a Modification

Restructuring your loan is another option to stop foreclosure. The lender may even waive the fees and include missed payments into the new loan. Many lenders empathizing with borrowers by not repoting missed payments to credit bureaus. Again, the more dilligent, sincere and honest you are regarding your ability to raise the money while getting through your current financial turmoil , the better you chances at a modification.

6. Resource funds From Friends and family

If you are experiencing a money crunch, having a good, open line of communication with siblings or parents can save the day. This is a great option to stop foreclosure, stressfull as it may seem. Many times through good communication and understanding funds via private loans can be secured and payed back with little or no interest. Willingness to pay back however is essential to keeping the stress level low between all involved.

7. The "Short Sale" Option

Consider selling the house for less than the outstanding amount owed the lender for the property. This is known as a short sale and stops the foreclosure process . Once sold, the lender takes the proceeds and forgives any outstanding balance owed. The advantage here is it avoids a negative credit report to the borrower. You may have to pay taxes however on the amount forgiven since it will be deemed taxable inome.

8. Look Out For Foreclosure Scams

Public records involving your foreclosure are accessible. This means there is no shortage of scam artists looking to con you into selling your home at an extreme discount to them - These blatant opportunists will then turn around and resell the home at profit making sure they benfit on your misfortune. The real slap in the face is that these "con artists " (many times these are people in the construction business that have convienent resources to home renovations) lead you to believe THEY are HELPING you financially. Watch it!


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