Five Alternatives to Foreclosure
Our last blog post covered some helpful hints to avoid foreclosure. It stressed the importance of contacting your lender as soon as you know you have a problem. The last thing a lender wants is foreclosure. It is their right to take over your home if you cannot pay your mortgage but there are many alternatives to foreclosure that they would rather have you consider. Not only will they work with you but they will help you limit your losses and avoid damage to your credit score.
These are the solutions you can discuss. Once you have reviewed them, it is still crucial that you contact your lender:
Seek a forbearance. A lender has the option to arrange a special forbearance. This is a repayment plan adjusted to accommodate your financial situation. There is even a chance that it may offer a temporary reduction or suspension of your payments. Whatever the cause of your situation, you will have to present your lender with information that proves your ability to make the new payments.
Modify your mortgage. Again, you will have to prove that you can adhere to a new payment plan. In this case, the solution is either to refinance the debt or extend the term of the loan. By reducing monthly payments, you should be able to catch up.
Ask for a partial claim. This will bring your mortgage current but you will have to begin making full payments to qualify. It will entail a one-time payment from the FHA’s Mutual Mortgage Insurance Fund.
Sell your home. To avoid foreclosure, you may have to sell the property for less than what you need to pay off your mortgage loan. This is a pre-foreclosure sale.
Give it back. If all else fails, you may have to surrender the deed in lieu of foreclosure. This one will hurt.
As if the possibility of foreclosure weren’t frightening enough, there is still so much to learn without having to worry about making payments and ruining your credit score. Do you know your rights and obligations as a homeowner? It may be tough enough negotiating with your lender without assistance. If you are overwhelmed, a real estate attorney can always help. Contact this office to make an appointment.
Please be advised that this blog is for informational purposes only, is not legal advice and does not create an attorney-client relationship.
The Law Office of Joseph C. Falk, LLC
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