Homeowners seeking to stop foreclosure usually dread with the facts that got them to a foreclosure state. Dealing with such facts tends to be stressful and depressing.
If you are in such as state and think back when you first purchased the house, the last thing you want is to lose it. But what brings about such a situation?
Here are the primary causes of foreclosure:
-Sudden job loss or unexpected unemployment
-Death of a loved one
-Divorce or loss of a second income
-Unexpected major house maintenance expense
-Excessive job obligations
So, How Do You Avoid Foreclosure?
If you miss more than 3 mortgage payments and the lender files a Notice of Default, you might think that losing your house is inevitable, but even then, there are a few things you can do to stop the foreclosure.
1. File For Bankruptcy
Doing this will halt foreclosure on its tracks. Once you file for bankruptcy, the federal prevents any debt collectors, including your home loan lender from continuing with the collection process.
According to law, foreclosure is a collection activity and once the lender is notified that you have filed for bankruptcy, the process will be frozen immediately.
However, this strategy is not as effective as it sounds, as once you go to court, the bankruptcy trustee will only take on the role of a mediator between you and the lenders.
So simply put, filing for bankruptcy just buys you some time to recover financially and doesn’t entirely get you off the hook.
Filing for bankruptcy ideally hurts your credit score and so, it is always advisable to consult a lawyer regarding whether doing so is an ideal strategy for your situation.
2. Foreclosure Workout
Up until the day your house is scheduled for auction, most mortgage lenders prefer to work out a compromise that allows you to get back on track with your loan payments instead of taking your house in a foreclosure.
One way you can work this out is renegotiating the mortgage payments terms so that they favor your current situation. You can also spread out the missed mortgage payments over a longer term.
For instance, if your payment is $1,200 per month, you can work out a deal with the lender to pay an extra $100 each month for the next 12 months until you catch up.
3. Short Sale
After the lender files a Notice of Default, but get a buyer before the auction date, they will consider it.
If a foreclosure happens, the lenders will simply try to resell the home and if you present them a reasonable short sale offer, it will save them the time and hassle. So if your house is on the market, aggressively seek for a buyer.
One way to ensure you sell the home quickly when facing foreclosure is by working with John Medina Buys Houses. We are a we buy houses Norwalk company that helps people get rid of their property problems.
We will quickly give you an offer, usually in less than 24 hours and close the deal in a week, or according to your period of liking.
You can avoid going through the stressful and embarrassing process of foreclosure by doing a quick deal with us.
We buy houses Norwalk and in areas around it, so feel free to give us a call today!