If you are behind on your mortgage payments and your lender has filed for foreclosure, though all might seem lost you still have options.
You will not be able to hold off foreclosure indefinitely you can do some things that will delay the foreclosure.
Firstly you must look honestly at your financial position and look at the options your financial standing allows you to take.
The basic options available to a homeowner in fore closure are:
- Pay off your outstanding balance and bring your loan current.
- Do a workout with your lender and try to reduce your current monthly payments and have your outstanding balance deferred to the end of the loan period.
- Do a loan modification.
- Do a short sale.
- Do a deed in lieu of foreclosure with your lender.
- File for Bankruptcy protection.
- File a court case against your lender for improper foreclosure.
Most homeowners who find themselves behind on their mortgage are not in a financial position to bring their loan current.
If you are working or have an income that will allow you to make reduced payments if your lender agrees to defer your outstanding balance this would be a great option to consider. However you must realize that if you have no income that this will not work for you.
As with point #3 you will need proof of income to do a mortgage modification.
As with point #4 you will need proof of income to refinance your home loan.
A short sale is a process where by your lender will agree to accept an offer from a prospective buyer for your home that is for less that the outstanding balance on your mortgage note. You will need to contact a realtor and have your home put on the market for sale.
A deed in lieu of foreclosure means that you will deed your home to your lender in return for them dropping foreclosure proceedings against you. The lender will own your home and your will move out.
Some homeowners will file for bankruptcy protection to stall the foreclosure process. This will give them extra time to live in the home rent or mortgage free and hopefully save some money to start a new life.
Currently some homeowners are challenging the right of the lender to foreclose on their home. They are asking the lender to produce the original note to prove that they actually own the loan and are not merely a servicing agent working for the real owner of the note.
Which ever direction you choose to proceed it is vitally important that you grasp the bull by the horns and deal with your situation.
- Answer all phone calls.
- Read you mail and if necessary reply to your creditors.
- When you receive papers form the Court read them and re read them. Act on them. If you do not answer a complaint filed against you in the Courts the lender will be given judgment against you by default. Answer the complaint and ask for a hearing. Just by answering the complaint and asking for a hearing you will stall the foreclosure process by up to six months.