Dealing with Foreclosure

Foreclosure is probably the worst nightmare for any homeowner with a monthly mortgage repayment; it is however very common especially in this tough economic times. Foreclosure happens when one is late with their repayments to the point of receiving a Notice of Default (NoD) from your lender. If the situation escalates to this point, then it if you want to keep your house, it is important to come with a plan of how to stop foreclosure.

When you take a mortgage, it is important to understand that as long as you are still doing monthly repayments, your property can be foreclosed if you are late in payments. Therefore one sure way to stop foreclosure is to ensure that you prioritize your mortgage payments over other monthly expenses. When you do this, you are sure of keeping your house. This might mean foregoing some other luxuries for some time but what could be more than retaining your home.

However, some situations are unpredictable, finances included therefore here are some of the ways that you can be able to stop foreclosure and retain your home.

  • Do your research: Before you commit to such an arrangement, it is important to understand the whole scenario first. This might involve engaging the services of an attorney so that you understand what happens before a closure and if there is any way around it. This might help you, in the end, avoid a foreclosure.
  • Consider a refinance: if the situation is a passing, you can reorganize your finances about speak to your lender so that they can offer you a refinance to enable you to service the mortgage as you put your financial situation in order. If you plan your finances well after this, you might be able to stop foreclosure.
  • Restructuring your mortgage loans: supposing your financial challenges seem to be long term and may result in you being unable to pay, it will be advisable for you to have a talk with your lenders about modifying your loan to stop foreclosure. This agreement may take the angle of extending your loan period so that the monthly repayments reduce. However for this to discontinue foreclosure, you should be able to stick to your end of the bargain.
  • Forbearance plan: if your financial challenge is temporary, you can talk to your lender and explain that situation. This might entail providing your bank statements and other relevant documents to prove your good will. By doing this, the lender is likely to suspend or reduce your mortgage payments temporarily. This will ultimately enable you to stop the foreclosure of your house, however, for this to work you need, to be honest with your lenders.
  • File for bankruptcy: this should be the last avenue and only if all others have failed to block foreclosure. When one files for bankruptcy, it will immediately halt the lender from foreclosing. Though it serves the purpose, it is not a permanent solution to halt foreclosure it, however, buys one time to figure things out.
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