This life is very uncertain, and financial hardship may strike anybody at any time. Foreclosure may appear imminent if you’ve fallen behind on your mortgage payment. Losing your home is a painful thing especially if it’s in foreclosure. But the good news is, that there is nothing in this world that comes with no solution.
Understand what foreclosure is and what you can do to avoid it in the smartest ways.
What is foreclosure?
Foreclosure is a legal procedure that allows lenders to recoup funds owing on a defaulted debt by seizing and selling the mortgaged property. Although the foreclosure procedure differs by jurisdiction, lenders generally strive to engage with debtors to get them caught up on payments and prevent foreclosure. In this situation, the house itself is collateral for the loan. The lender can either sell the house or evict the homeowner from the property, ultimately damaging its credit score for at least seven years.
Stages of foreclosure
If you fail to pay mortgage payments, your lender has the right to foreclose your house. But don’t worry, it comes with stages, and you got chances to stop it. Here are the stages of foreclosure:
Acceleration Letter:
Right after you stop paying, your lender will send you an acceleration letter. It’s a warning for you to pay the dues; otherwise, the foreclosure process will start.
Foreclosure Starts:`
Depending upon the state, if you didn’t answer or take notice of the acceleration letter, foreclosure ultimately starts. It can either be judicial or non-judicial.
Judicial & Non-Judicial Foreclosure:
The lender will file a complaint stating the issue in detail is a judicial foreclosure. The court summoned the homeowner by allowing him to be heard after court.
Issuance of Judgement:
If the court finds the debt valid, it will issue a judgment, including the total amount owned with the payment and cost of the foreclosure process.
Sheriff’s Sale:
A sheriff’s sale will be authorized on the order of the court. Anyone can take part in this sale, and the property will be delivered to the highest bidder.
Five constructive ways to stop foreclosure
-Contact Loan Servicer
Talking to the concerned person is considered the most effective way to find a mid-way for both parties. You should talk to the loan service to:
- Agreement on a payment plan
- A temporary Forbearance
- A modification in the loan terms
It is said that communication is the key to most problems. The best way is to communicate with the loan servicer right after you miss the very first payment.
-Sell Your House
You will have to lose your home either way, but it will be a wise decision if you decide to sell it and manage enough money to repay the outstanding balance. Selling it As-Is at the right time can keep your credit rating and stop foreclosure at the same time.
Selling the home As-Is means you don’t need to spend dollars on it. Contact authentic cash buyers like His and Her Investments and leave the rest to them. By that means, you can have your money in a matter of days without any adverse effect on your credit rating.
-File A Lawsuit
When your mortgage agreement contains a “power of sale” clause, you can file a lawsuit. This states ‘that the lender has the right to foreclose the property without involving the court. That’s a pretty nice way to stop the foreclosure. You have to prove the following points in order to stop the foreclosure:
- The lender does not own the promissory note.
- The lender disobeyed a state-mandated mediation obligation.
- The lender broke state law.
- In the foreclosure procedure, the lender failed to complete all of the essential processes (as determined by state law)
- The lender made another critical blunder.
If you fail to prove these points, the foreclosure won’t stop, and it can be a risky game for you. You will have to pay the lender’s and attorney’s court fees.
WORDS FROM EXPERTS:
You should obtain legal guidance before filing a lawsuit; an attorney can tell you whether you should file a case or alternative options for stopping foreclosure.
-Request Modification In Loan
As the name implies, modifications in the existing mortgage agreement when he fails to pay the payments before the due date. This procedure is successfully handled by an attorney or renowned settlement company. Again, it’s all about your communication with the lender. You have to make him confident that you can pay all the money once he agrees to modify the plan.
It is worth noticing that this plan doesn’t work for everyone as it’s utterly dependent on your lender if he agrees or not. You can only be able to stay in your house if the modification allows you to keep the new monthly payment within your budget. Another drawback is that lenders aren’t bound to pause your foreclosure while considering your modification request.
WORDS FROM EXPERTS:
This method has no surety to pause the foreclosure process right away. If you are the one who prefers comfort and peace over everything, I would recommend you consider another tactic.
-File Bankruptcy
There is a purpose for listing it in the end, as you should consider it a last resort. It badly hurts your credit score, but filing chapter 13 or chapter 7 bankruptcy is one of the best ways to stop foreclosure if the foreclosure is days away.
Your creditors, including your mortgage lender, must immediately cease attempts once you file a bankruptcy case. An “automatic stay” is the term for this. You still owe the money, but even if the mortgage lender requests the court to restart the foreclosure, you’ll have a few months to find a new job or resolve the short-term financial issues that are keeping you from paying your bills.
This also provides you the opportunity to negotiate a repayment plan with creditors, potentially avoiding the sale of your house to pay off your debt.
How to Ask for help?
Handling foreclosure might be disturbing. You don’t need to act like an iron man because we are humans. Start looking for options to seek help. Here are a few mentioned, you can consider:
-Ask for Non-Profit Group Assistance
There are a number of Non-profit organizations that work for free to provide maximum help in avoiding foreclosure. HOPE NOW, Homeownership Preservation Foundation, Making Home Affordable Program, and ‘NeighborWorks America’ are a few of them.
-Hire Foreclosure Attorney for Legal Advice
Based on the situation, a foreclosure attorney can help you in the best possible ways. There are a lot of legal technicalities that a layperson can’t handle. At that time, he can give you assistance and ways to get out of the situation more quickly and efficiently.
The bottom line:
First, try to save some money for rainy days to stay in your home comfortable and peaceful. If you are for sighting foreclosure, it is better to plan things at the very moment. The most sensible course of action is to contact your lender as soon as possible. Never ever ignore the foreclosure process by not replying to your homeowner’s messages or calls and block all ways for him to communicate. Its impact’s very bad.
Choose the most suitable way, according to your situation, to avoid foreclosure on your home by concerning legal advisers or any trustworthy persons. It is a very sensitive matter and can cost you a lot. Still, if you don’t want to deal with this time taking procedure, simply contact Blue Halo Homes and sell your house within a matter of days.