How To Stop Foreclosure - Options To Help You Avoid Foreclosure

Jump to navigation Jump to search

How to stop foreclosure on your home can be a difficult thing to do. There are so many things that have to be figured into the final calculations of a mortgage, including fees and expenses on top of the principle owed. It is often an involved process that starts with the homeowners being informed of their rights under the law and then working with the lending entity to find a way to get the best deal for both parties involved. It will probably take months before a homeowner finds what they are looking for and in some cases, even years before they have found what they want.

This process is why it is so important for a homeowner to have as much information as possible about how to stop foreclosure before they start their loan modification application process. This way, they will have every single piece of information they need to have to convince the lender to agree to their terms. And while each situation is different in the way that lenders evaluate loan terms, there are some core principles that remain the same when it comes to loan modification.

In general, there are three main points that lenders will evaluate when evaluating a homeowner's ability to repay the debt. The first thing that a lender will consider is the borrower's credit rating. Every major credit bureau keeps one or two reports on you called your credit score and this report is used by lenders like Bank of America, Chase and Wells Fargo to determine how likely you are to pay off your loan and avoid a foreclosure process. If your FICO isn't great, you are going to have a very hard time getting any type of financing from a lender.

The second part of the evaluation will focus on determining if you are a homeowner who can make payments on time to avoid foreclosure. This is why a loan modification is often a very good solution for someone who is a homeowner who can afford their mortgage and doesn't qualify for a short sale. Banks don't really like to short sale because they lose money on the deal. But if you can show them that you have the means to keep up with your monthly mortgage payments, then they may be more likely to give you a chance to renegotiate. The lenders might agree to let you defer your interest rates for a certain period of time, reduce the principal balance of your loan or even extend the time frame for which you have to repay the loan.

If you fall into the last category of homeowner above the third category of those who are eligible for a loan workout (which means that you have fallen behind in your payments and have some other financial problem that has made it impossible for you to keep up with your payments), then your best option is probably to try a deed in lieu of foreclosure. A deed in lieu of foreclosure is where you sell your house for less than what you owe your lender instead of going through the traditional foreclosure process. The lender will get a copy of the deed in lieu contract. The deed in lieu contract gives the lender permission to take back the property without having to go through the court system.

This type of agreement should be used as a last resort when trying to keep your home. When using this option to stop foreclosure, you are better off going through the court system because it will cost you more money and take longer to accomplish. It is recommended that you use the services of an attorney to help you negotiate the details of your deed in lieu agreement. An attorney can also explain to you the difference between a deed in lieu of foreclosure and a bankruptcy to make sure you understand the implications.