Learn how to stop foreclosure with these tips and guidelines. Stopping a foreclosure, once a notice of default has been sent is more difficult than in the beginning stages. A foreclosure is where the owner has failed to make payments on time. However, in some cases the government will foreclose on a property due to taxes, drugs and fire arms.
How to stop foreclosure
Wanting to stop, prevent and avoid foreclosure may be easier than you thought. When you miss your first payment, contact the bank and talk to the loss and mitigation department. Tell them that you need help!
The bank may offer you several options such as:
- Refinancing -use a relative or friend, as your credit may be in bad shape now.
- Delaying payments until a tax refund or inheritance is here.
- Spreading the missed payments over a longer period.
- Negotiating a reduction in interest.
These things only help if you have a job. If you find that the bank is not cooperating or does not care, then contact the HUD homeowners assistance program. You can contact them on their website Makinghomeaffordable.gov.
More help for homeowners
Conditions
The government program helps homeowners by reducing the payment to 31% of their income. The homeowner must have missed two payments and qualify for the program. If the government finds you missed the payment on purpose, you will be excluded immediately. There are very few homeowners who actually qualify for the programs. So, do not put all your hope in this program.
Short comings
This program has many flaws and although it was originally seen as help for homeowners, it would eventually look like a key to HUD foreclosures. Only 23% are qualified. If you do not have a job, then a short sale or deed of lieu may be your only other options.
Short sale and deed in lieu options
A short sale is where the lender agrees to accept less than what is owned on the property and the seller agrees to move and leave the property in good shape. The home must be listed with an agent and a viable offer must be presented to the bank along with qualifying documents from the seller. The home must be sold at market price, not at a low ball price as some may assume. It is a long drawn out process, so start early.
Your other option is a deed in lieu of foreclosure. In this process, you simply turn the key over to the bank and walk away. Most banks will not agree to this unless they see this as a way to avoid bankruptcy or spending more money on evicting you.
Stopping foreclosure is always the best avenue to avoid future legal problems.
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