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The good news about foreclosures is that in this market, the last thing the banks or lenders want to do is to foreclose on your home, which will be added to a growing inventory of unsellable houses. Now, while lenders may not want to foreclose, they won't hesitate to file a notice of default to protect their own interests.
If this has happened or is about to happen to you, please do not ignore the situation at hand, hoping that it may go away. It will not. The problem will escalate and you will lose your home before you know it.
Depending on your personal and financial situation, you have a few options in avoiding a pending foreclosure:
1. Pay the money owed - as easy as this may sound, there may be ways for you to come up with the arrears amount, whether by borrowing from relatives, selling off your unused vehicles, or converting items of value into cash. There are ways to increase your cashflow, and a skilled specialist can show you how in your specific situation.
2. Create a forbearance agreement - this agreement between you and the lender details the action you will take in the upcoming months, to pay back the arrears amount. This plan of action is also called your repayment plan, or repayment proposal. A lender typically will consider a forbearance agreement, because it will much rather you pay back the money on a repayment plan, than to try to sell the property. An example of a repayment plan is as follows:
#Example
Pay $1000 per month for 3 months, and then pay $1500 per month for another 6 months, in order to get the loan back to current. If this is not achievable, then both parties agree on the action of foreclosure.
3. Refinance your mortgage - Firstly, speak to your current lender and depending on your debt to income ratio, they may wish to provide refinance for you. If they reject or do not respond to your request, you have the option of contacting other banks of your local credit union. The refinance with credit unions may be at a higher interest rate, but at least it gives you some room to work out your financial situation.
4. Sell your home - this may be the hardest choice to make. Obviously if you have equity in your home, then selling it may achieve a much higher price than what you would receive at foreclosure. If you owe more than the value of your home, then you may want to engage in a short sale. You may ask your real estate agent to negotiate with the bank whether they would be willing to accept a short sale.
5. Lodge a complaint to your Ombudsman - depending on where you live in the world, you may have access to a financial ombudsman. The role of the financial ombudsman is to assess whether financial institutions have acted correctly in accordance to their own lending policies, which may include taking legal action against you incorrectly. Even if the legal action was taken correctly, and the bank has done nothing wrong, the financial ombudsman may also be an intermediary for you to negotiate a repayment plan with the lender.
6. Speak to a specialist - losing your home will be the last thing that you want, so don't try to handle a pending foreclosure by yourself. Get help from a specialist, whether it be from your local legal center, a lawyer, or a financial counsellor.
There are many ways to stop a foreclosure, but you must act now.
If you would like to talk with a specialist right now about your specific situation, whether it be a pending foreclosure, legal matters, refinancing, loan modifications, or foreclosure defense, visit our website now: http://www.foreclosuredefensevlog.com/
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