Finance Globe

U.S. financial and economic topics from several finance writers.
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Three of the Best Ways to Stop Foreclosure

From the month of September 2013 to October 2013, foreclosure filings in the United States increased by two percent. This is more common in some states than others, with Florida holding steady at the top with a foreclosure rate of approximately 1 in every 332 housing units.

If you are faced with foreclosure, you don’t have to give in just yet. You don’t have to back down from the bank, letting them take your home.
Despite the fact that you have made mistakes in the past, there are ways to stop the foreclosure process. Here are three methods to consider:

1. Contact the lender to discuss your situation. If you think hiding from your lender is the right answer you need to reevaluate your stance.

No matter how far along the lender is with the foreclosure process, it is never too late. Reach out to your lender to discuss your situation, explain your troubles, and see if there is anything you can do to slow things down.

Lenders are not interested in foreclosing on homes. In addition to the hassle of the entire process, they lose money in the long run.

You may be able to explain that your financial issues are temporary, due to a job loss, for example. Once they know your situation they are more likely to cut you some slack.

Tip: the longer you wait to contact your lender the less chance there is that this method of stopping foreclosure will be successful.

2. Loan modification. While discussing your situation with the lender, ask if there is there is any possibility of modifying the terms of the loan.

Some options include:
  • Paying less on your mortgage now until your financial problems clear up
  • Extending the term of the loan, thus decreasing the monthly payment
  • Lowering the interest rate to make your payment more affordable
  • Switching to a fixed rate loan so you know what your obligation is now and in the future.

3. Request forbearance. This does not always work and it is not a long term solution, however, it may be enough to help you avoid foreclosure as you get your finances back on track.

When you request forbearance, you are stalling the foreclosure process. This allows you to make no payment or partial payments for a period of time determined by you and your lender.

Down the road you will have to pay the full amount of your loan, but for the time being you are slowing down the foreclosure process and putting yourself in position to catch up.

Just because you have received a notice of foreclosure doesn’t mean your home is as good as gone. With the three ideas above, you may be able to stop this process and stay in your home indefinitely.
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Saturday, 19 October 2019

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