Options to Stop Foreclosure
Here is a list of possible solutions that homeowners are able to obtain to stop foreclosure or as a general mortgage solution.
- Loan Modification– This is a popular (preferred by many) method of foreclosure prevention. The Homeowner has a great chance of coming out of this whole deal with improved terms as a result of an effective mortgage modification.
- Long Term Solutions– They offer a wide variety of long term solutions that stop foreclosure. These agreements can take many shapes. For instance they could simply get a Homeowner a forbearance agreement or perhaps a repayment plan. Both of which would reinstate the existing loan.
- Temporary payment relief – They can also provide a brief short term agreement that would turn into a long term agreement 3-9 months down the road. For example if a Homeowner just needed a few months to catch up they could work out a deal with your lender that may allow interest only payments for six months with the understanding that the Homeowner would use this short-term relief to save and catch up on their personal finances.
- Deed in lieu of Foreclosure – If it simply is not feasible for the Homeowner to keep the home then they can at least get you off the hook free and clear with a deed in lieu of Foreclosure. This for all practical purposes will seem no different then a foreclosure to the Homeowner. But there is in fact one major and crucial difference involved. Like foreclosure you must hand over the ownership of your home, but in foreclosure if the home does not sell at auction and the lender takes back the property and sells later for a loss, the lender can then hold you liable for the arrears or loss on the sale. That wold mean you can lose your home and still owe a ton of money. However with a deed in lieu of foreclosure the lender except the property free and clear. Meaning you are considered square.
- Short Term Agreements – If we stay in this scenario of being unable to afford the home, it is still possible to stop foreclosure. In other words a homeowner can prolong the inevitable and buy some extra time that will allow you to live cheaply for several months so that you can save funds and make new living arrangements. Also in the right situation you can use this time to sell your home on the open market which will allow you to keep any equity you have accumulated over the years.
- Short Sale – Also if you have a buyer you can negotiate a short sale.
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