If you run into financial difficulties, there could come a time when you realize that paying your mortgage is next to impossible.
While missing one payment isn't the end of the world, this is a bad trend that you don't want to start. If the problem persists, you could soon find yourself face to face with a foreclosure notice.
The thought of losing your home to foreclosure is enough to keep you up at night. Fortunately, you don't have to sit back and wait for the process to unfold. There are steps you can take to stop foreclosure, all with the idea of bettering your financial situation and remaining in your home indefinitely:
- File for bankruptcy. The primary benefit of bankruptcy is the automatic stay. With this in place, your lender is not permitted to proceed with the foreclosure process. While time allows, you should learn more about your situation and the steps you can take to make things right with your lender.
- Loan modification. Many people are under the impression that their lender is out to get them. Rather than contact their lender to discuss their situation, they run and hide. You don't want to do this, as it only makes your situation worse. You should contact your lender to discuss your loan modification options, as this is often the quickest and most effective way to find a resolution.
- Short sale. With a short sale you don't have the option to stay in your home. Instead, you're asking your lender if you can sell your home for less than what it's worth and then walk away with no additional obligations.
- Deed in lieu of foreclosure. This is when you sign the deed of the home over to the bank. While this sounds like a good idea, your lender would probably rather work out another arrangement, as they aren't in the business of holding and selling real estate.
These are among the better ways to stop the foreclosure process. Since all of them are associated with various pros and cons, be sure to learn more about each one.
As you compare your options and focus on your legal rights, your situation will become more clear.