It’s no secret that living in a complete home with your loving family and creating memories is a huge part of the American dream. As such, a lot of people dedicate tremendous efforts into buying their dream home.
Unfortunately, that dream can easily turn into a nightmare. When you sign up for a mortgage, it means you’ve agreed by law to pay the lender back the amount loaned in full as per the agreement. To protect themselves from losing their money, the lender has the right to take back your home and sell it so they can get back their money.
If you’ve been unable to pay your mortgage payments for some time now and your lender has filed a NOD (Notice of Default) then you run the risk of having your home foreclosed. The good news is with certain strategies, you can stop or postpone the foreclosure process of your home. Here’s how you can do it.
1. Modify the Terms of Your Loan
If you’re unable to fully make your monthly mortgage payment, then you should try to modify the loan. This could mean extending the loan term or reducing either its interest rate or the amount of money you pay back monthly.
If your lender is open to restructuring the terms then you’re in luck. However, some lenders need to be convinced that your financial situation will improve so they can consider modifying your loan.
2. File for Bankruptcy
Declaring bankruptcy should only be a final resort when all else has failed. Once you file for bankruptcy, federal law restricts any debt collectors from collecting any money from you. However, it comes with serious consequences and may not even work to save your home.
Before turning to such an action that most would consider drastic, seek foreclosure help York, PA. It has outstanding and experienced housing counselors that can help you in your engagement with your lender so that you can avoid foreclosure.
3. Request for Forbearance
Most of us have found ourselves in situations that require an immediate need of our money such as medical emergencies. Such financial hitches may hinder you from making your mortgages on time. For this reason, you should ask your lender to agree to a forbearance.
A forbearance basically involves the lender agreeing to temporarily postpone your mortgage payments. It will give you time to repay your mortgage and prevent the lender from losing money as financial institutions usually run losses accrued from foreclosures.
4. Doing a Pre-Foreclosure Sale
When foreclosure is inevitable, then you could consider selling your home. As much as the idea is to avoid losing your home, this option allows you to cushion the financial impact since the foreclosure is bound to happen. However, your lender needs to give their approval for you to do a short sale. Doing otherwise might land you in steep legal trouble.
Be Wary of Foreclosure Rescue Cons
Unfortunately, this industry has experienced a rise in cases where homeowners are scammed off of their money by people pretending to be house counselors.
A red flag to watch out for is anyone who needs money in advance to help you sort out your foreclosure issues. Your best bet is to consult a counselor approved by the United States Department of Housing and Urban Development.