5 Ways to Stop the Foreclosure Process
Foreclosure is a harmful process for many homeowners. It occurs when you miss more than three mortgage payments, which means you will lose your home. Here are the five best ways you can use or practice to stop the foreclosure process.
Most mortgage lenders do not schedule your home for auction and wait for you to carry out negotiations. So, if your lender is giving you such an opportunity, you must not miss it and work with them on stopping the process. When you and the lender reach an agreement based on specific constraints, you will get back on track.
Once your lender files a Notice of Default (NOD) before scheduling your house on auction, your lender should consider an offer from a buyer. Usually, when the lending company foreclose your home, they will try to resell your home.
Therefore, you should give them a reasonable short sale offer and motivate them to consider it in terms of saving time, effort, and finding a qualified buyer in the market. After you have listed your home on the market, make sure you seek a buyer for it, even after the lender initiates the process of foreclosure.
It is one of the most effective ways to stop foreclosure in its tracks. After filing a bankruptcy petition, your lender won’t be able to foreclose on your home. It is because Federal Laws prohibit debt collectors from carrying out their operations.
In this regard, a mortgage lender is no exception, and the company must stop its collection activities. Foreclosure is a collection activity, and when you file for bankruptcy, your lender will freeze the process of foreclosure as a legal requirement.
Deed in Lieu
Most often, lenders show reluctance to take your home through a deed in lieu. There are various reasons why they do this – for example, the lending company fears that you may sue it later alleging the company didn’t understand the circumstances.
Also, the lender must pay off any home equity lines of credit or mortgages before executing a deed in lieu. It shows the lender that your financial stress is real. When you allow the foreclosure process through a deed in lieu, the lender will come to know that you are not faking financial burden or poverty.
The lease option is another way to stop the process of foreclosure. It involves the buyer to become your tenant while you own your home. The process continues until the buyer has enough money to pay off down payment and improve his or her credit.
Sometimes, the buyer makes a one-time, lump option, which means he or she will make the payment upfront to buy your house. It is essential to apply this option of payment to the mortgage current.
It means the buyer will pay lease and you can apply that payment to your mortgage. You must negotiate lease payments to stop the process of foreclosure successfully. The payments must cover all your mortgage payments, insurance obligations, and property tax.
|Thomas Moore is a proud American with a Bachelors Degree in Business Administration from the University of San Diego. He has been in the financial industry for many years holding numerous licenses in multiple states. He currently helps operate cashkingco.com and is our resident expert on all things finance and a great writer. LinkedIn Profile|