5 Useful Strategies You Can Use To Stop Foreclosure

Most home buyers have mortgage plans which they pay every month and sometimes there are instances when there are unexpected things that happen which result to you not being able to pay your monthly mortgage fee.

So, are you already missing more than three payments on your mortgage and is your lender preparing to file a Notice of Default (NOD) or has already filed it? You might be deeming the worst things are bound to happen at this stage and you're getting ready to move out of your property soon but before you do that, try these five strategies first.


Work It Out With Your Lender


You may think that the moment you miss payment, your lender wants you to move out right away but in reality, they would rather enter into a compromise deal with you to update your mortgage plan than put your home into foreclosure. Grab this opportunity to secure your property.



Short Sale


After a Notice of Default has been filed by your lender and right before the scheduled auction, when there is an offer from a buyer, the lender must contemplate it. Your lender will find it practical and trouble free when you talk about a rational short sale offer since after foreclosure, your lender just wants to try to resell the property.

   
File For Bankruptcy


The good thing about filing for bankruptcy is that it will buy you some time to financially recover in case you lost your job or whatever it is that's making your financial status a little more difficult, you failed to pay your monthly debts and the bankcruptcy trustee "will only act as a referee between you and your creditors". Once bankruptcy has been filed, federal law will not allow any kind of collection activities anymore.  According to the law, you, your mortgage company and other creditors need to come up with a good deal for a "reasonable repayment plan" to help you finish off your debt. Before resorting to this, consult a bankruptcy lawyer first to determine if this is a good move for you.



Deed in Lieu


A deed in lieu means that you, as the homeowner will voluntary sign the deed of the home back to the bank when you are facing foreclosure. Deed in lieu will have the same effect to you as the homeowner regarding your credit and foreclosure. There is a downside to deed in lieu which includes fear of the lender to consent in taking the home back from the owner since they are afraid that the homeowner will later file charges stating they have no idea what was happening during the event or a second and third payments must be made by the lender or home equity lines of credit (HELOCs) before agreeing on the deed of lieu and lastly, the lender just wants to make sure that you are really facing some financial difficulties.

Most of the time, deed of lieu is not allowed but only happens when; foreclosure is about to happen, when said home has been on the market for more than a few months and still hasn't found a buyer, there aren't any junior loans that the lender needs to pay, the homeowner has a proof of their financial undertakings of the moment and the homeowner is the one who offered the process and does the documents pertaining to why they requested this deed.


Assumption/Lease-Option


Most mortgage plans has a "due on sale" where in the borrower will agree that the total amount of loan will be paid off solely by him in case they transfer the property. But you can ask your lender to revise your loan, to remove the clause and let another buyer to shoulder the loan. This is an advantage not only for you but also to the lender which may help him say yes to your proposal. Through this, you can strike a deal from the buyer which will allow you to pay off your existing past mortgage balance.

When you enter into a lease-option agreement, the buyer will now become your tenant while you still own the property until he has procured enough money for down payment, "improve their credit or sold their other home". Apply for this option to update your mortgage. The monthly lease payments you get from the buyer will go to your mortgage and to successfully use this option in stopping the foreclosure, you must come up with a good deal wherein the lease payments will cover most if not all your mortgage dues, property tax and insurance and extra for payment when you live elsewhere.