Stop a Bank Foreclosure – Saving your home and avoiding foreclosure isn’t as difficult as you think

You bought a great house a few years ago. You were so excited to realize your dream of owning a home.

Today the dream has turned into a nightmare and you are now faced with foreclosure. How can you avoid this?

Steps you can take to avoid foreclosure and save your home:

Not paying your home loan is very different from not paying your credit card bills.

Your house is a secured debt. This means that if you stop paying, the lender will take back the home. Foreclosure.

Early in the default process, you can still come back off the brink if you haven’t missed more than a monthly payment or two and the lender didn’t overspend to bring you back into line.

As the foreclosure process progresses, the amount of overdue debt owed and the banks’ legal fees, which are normally charged to clients, increase.

Borrowers who try to ignore their financial problems and the calls from their lenders are likely to lose their homes.

Around 40 percent of people who are behind on their home payments never contact the lender. That’s a big mistake.

Understand that the foreclosure process is a well-oiled machine. Let’s say your payment is due on the 1st. Once the 16th rolls and you still haven’t paid, the bank starts watching you closely and the machine starts rolling.

Once this reaches 90-100 days, you will be hit with legal fees on top of your mortgage payments and you risk losing the home.

However, taking your home is the LAST thing the lender wants to do, no matter how much equity you have.

Banks are in the lending business. You are not involved in real estate sales.

Foreclosure is expensive, tedious and stressful. Nobody wants that to happen. You want to get your credit back on track. That is the goal.

Then how do you stop it and get it going again?

1) Be serious about quitting. Lay back your pride and don’t be ashamed. Talk to the lender about all your options.

2) As soon as you know you will default on your first payment, contact the lender. Communication and honesty are valued and rewarded with understanding.

3) Never ignore the lender’s calls or letters. Ignoring it makes it worse and speeds up the process. If you don’t tell them the problem, they’ll just assume you don’t care and will be more aggressive in their house-taking strategy.

4) Stay positive. Your situation is not hopeless. Lenders deal with cases like yours every day. You are not alone. No matter how angry they sound at you, don’t take it personally. There are proven collection methods and they will apply them to you.

5) Be honest about what you can do and be willing to make sacrifices. They will not accept a payment plan where you pay back $100 a month what you are in arrears with. You have to show them that you are committed to keeping your house. It may hurt financially, but if you want to keep your home, you will make the sacrifice.

6) Don’t overpromise and underdeliver. Follow all payment schedules as promised. If you promise an extra $500 a month until you get caught, you better stick. Failure to fulfill your promised agreement will result in no further agreements.

If you do all of these, you will likely stop foreclosure.

Here are some of the options you have to save your home or loan:

You can request full reinstatement of your mortgage if you accrue late payments in one lump sum by a certain date.

You can enter into a deferral agreement that allows you to defer payments for a short period of time, with the understanding that another option is then used to clean up the account.

You can apply for a repayment plan, while the lender may agree to let you catch up by adding a portion of the overdue amount to a certain number of monthly payments until your account is current.

You can apply for a mortgage modification where you can make your regular payment now but not collect the amount past due. In this case, the lender might agree to amend your mortgage.

One solution is to book the overdue amount into your existing loan and fund it over the long term. This is a very popular method.

A change may also be possible if you are no longer able to make payments at the previous level. The lender can modify your mortgage to extend the life of your loan.

For example, if you have 25 years left on your loan, they can extend it to 28 years to help.

You may want to sell the house to save on your loan. If catching up isn’t possible and you let the lender know you’re selling it, they may agree to put the foreclosure on hold to give you some time to try and sell your home.

If none of this works…

If you can afford the normal monthly mortgage payment but can’t afford to make up the arrears and legal fees because the lender is proposing a relatively strict repayment schedule, you should consider filing for Chapter 13 bankruptcy.

This temporarily stops the foreclosure proceedings. The mortgage lender may need to accept a more borrower-friendly repayment schedule, e.g. B. one that allows five years to repay the arrears instead of one or two.

If you just need a little more time to sell your home, consider refinancing with a “hard money” loan.

Although they have very high rates and fees, the loans, usually from individuals, can buy people the few extra months they need to find buyers. Most banks will be more than happy to take cash, no matter how close it is to foreclosure. If a relative steps in with $10,000 to bring the loan up to date, a borrower can usually just turn it over to the lender and carry on as usual.

You must understand that late mortgage payments are very serious. Although they want to work it out with you, the lender won’t just let you negotiate a payment schedule to get you up to speed with a file review.

Plan to share with them all the details of your current financial situation, including income and expenses.

Open communication and honoring all agreements made are key to saving your home from foreclosure.