How to Stop a Foreclosure
That event that you were fearing is close to happening. The phone rings day and night. Not only do bill collectors call, but the bank started calling. First, they sent a notice stating that you were late with your payment. Then they started calling warning about foreclosure if you didn’t bring things current. You can’t sleep. Instead of counting sheep you are counting sheriff’s visits to your door tacking up notices to vacate. You moan in your sleep. “Please someone tell me, how to stop a foreclosure?
- Bringing the Loan Current a.k.a. Reinstatement – Believe it or not, your lender wants to work with you to help you get back on track and make your payments. Foreclosure is no picnic for either party involved. And, frankly, both you and your lender lose in the end
- Work Out a “Forbearance Plan” – a forbearance agreement provides short-term relief for borrowers. With a forbearance agreement, the lender agrees to reduce or suspend mortgage payments for a certain period of time and not to initiate a foreclosure during the forbearance period.
- Sell the Home to a Cash Buyer –
- Try calling us. It is quick! You can sell your house fast in Kansas City normally in 30 days or less. That is much quicker than a traditional sale, which can take several months, and closing takes places after repairs. In most cases when an investor and a seller can agree on a price immediately, they can close as fast as one to two weeks.
- A real estate investor will buy as-is. Worrying about some repairs that you’ll need to fix based on an appraisal? An investor will estimate the repairs needed to restore your property, arrive at an offer, and will purchase the property in whatever condition.
- No Fees! A real estate investor doesn’t charge you a real estate commission and may take care of any other nagging financial problems such as back taxes, code violations, the risk of foreclosure, or past due water and sewer bills.
- Selling Through a Short Sale – you may be able to sell your home with the bank’s permission before the foreclosure process begins. A pre-foreclosure sale, also known as a short sale, allows homeowners to sell their home at current market value and use that money to satisfy their mortgage [source: Chicago Tribune].
- File for Bankruptcy – Contact a bankruptcy attorney. You need to know your options so you can make informed decisions. Filing for bankruptcy stops a foreclosure proceeding.
- Repayment Plan – Repayment options could include a plan to repay missed payments in addition to making monthly payments, especially if there is a temporary hardship
- FHA Programs for Homeowners – Home & Garden writes about the partial claim, a loan modification offered by the U.S. Department of Housing and Urban Development (HUD) for FHA-approved loans [source: HUD]. The FHA provides an interest-free loan to pay off your missed mortgage payments, and it doesn’t need to be paid off until you sell your home or make your last mortgage payment [source: HUD]. There are many programs that offer help to those with floundering financials.
- A Deed-in-Lieu of Foreclosure – a deed instrument in which the borrower conveys all interest in a real property to the mortgagee (i.e. the lender) to satisfy a loan that is in default and avoid foreclosure At the height of the housing crisis in 2007-2008, it was called “jingle mail.” Homeowners simply put the house keys in an envelope and mailed them to the bank and then drove away. A deed-in-lieu is a more formal process for jingle mail.
- Loan Modification – Loan modification could include a reduction of the interest rate, convert from a variable interest rate to a fixed interest rate, or extend the length of the term of the loan. A loan modification agreement is a permanent solution to unaffordable monthly payments.
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