Losing a home is a very stressful time is a homeowner's life. It is easy for people to say just walk away and start over. Homeowners have an emotional attachment to their homes and walking away isn't always easy.
Foreclosure proceedings vary from state to state and the economic climate can also play a part. Once the clock starts ticking, the homeowner is limited to their options. Some will walk away while others fight to keep their homes.
Knowing how to stop foreclosure at the last minute before you need to know, is useful information to have. But let's face it, no one expects to have financial or personal hardships that can cost them or loved ones their home.
In the event, you're currently in foreclosure we have you covered. Keep reading our tips or how you can stop the foreclosure before the bank takes your home.
How to Stop Foreclosure at the Last Minute?
Waiting until the last minute to stop a foreclosure is never a good idea. Following the last housing crisis, federal laws were enacted to protect homeowners. As a result, lenders must wait until the borrower is over 120 days behind on payments to start foreclosure.
Once the filings are made, it can still take one to four years before the courts approve the foreclosure. During this time you have opportunities to pay any outstanding payments and fees.
Stay in Contact with Your Lender
When is it too late to stop foreclosure? The moment you begin to ignore that you're experiencing financial difficulties.
Believe it or not, the lenders do not want your home. It costs more to remove you from your home than it does to work with you to salvage the loan.
Is your goal to keep your home? If so, it is vital that you keep the lines of communication open with the lender.
There are programs to help homeowners get caught up on their mortgage. When borrowers are facing financial hardships, the lender has the ability to do a loan modification. Sometimes the modification could include forgiving the past due amount or tacking it on to the end of the loan.
Ask for a Short Sale
A short sale is how to stop foreclosure at the last minute. The bank allows a sell of the property, usually below what is owed. On the backend, they forgive the difference.
A short sale will impact the homeowner's credit but by this point, the damage is already done.
Short sales are not a quick fix and can take months to close on. However, the ultimate goal is met which is to stop the foreclosure.
Pay Off the Outstanding Amount
By the time a homeowner is facing foreclosure, the total amount owed could include five months of mortgage payments. Add on to that late fees, interest, and filing fees from the lender. For each month that passes the outstanding balance increases.
Paying off the outstanding balance is not an impossible feat. It is one way how to stop a foreclosure. Talk to family and friends and maybe someone can come through with a last-minute loan.
You could have items of value you can sell. Perhaps you can borrow from your 401K, or sell an extra vehicle. Be creative with your options and explore ways to come up with the cash to save your home.
Avoid Foreclosure Scams
There are people that will take any opportunity to scam people that are at their weakest point. Preying on someone going through foreclosure is not exempt. Their pitch may seem like a great way to stop a foreclosure but it can get you deeper in debt.
People trying to pull off scams try to reassure their victims by getting them to believe they have helped others. The truth is they are only trying to make money. Here are a few scams to beware of.
- Someone Offering the HAMP Program which ended in 2017.
- They charge you to perform a loan modification.
- They want to help save your home for a fee.
- You're encouraged to stop talking to your lender.
Remember, only your mortgage company can modify your loan or forgive the outstanding debt.
Seek a Buyer For the Home
If you're wondering if there are any foreclosures near me, the answer is most likely yes. You're not alone when it comes to the reality of losing your home. Understand you may not come up with the resources to save the home, or the bank may not approve a short sale.
Don't let this stop you from seeking a buyer. One way to stop a foreclosure is to find someone that specializes in buying homes in foreclosure. They will pay-off the mortgage and some will even put a little cash in your home.
Do your research and learn more about foreclosures and selling your home before the bank is authorized to seize the property.
Foreclosure is usually the manifestation of years of financial problems. Whether you want to keep your home or walk away, bankruptcy might be the answer.
Bankruptcy offers filers two options. With Chapter 7 you liquidate all of your debt. In Chapter 13 the courts give you the option to reorganize your debt and set-up a repayment plan with creditors.
Both will impact your credit but recovering from bankruptcy helps you rebuild faster.
Surrender the Home
As a last result, you could surrender the home to the lender. Don't just walk away as this will lead to a foreclosure. Instead, negotiate your exit with the bank to ensure you have no financial or legal liability afterward.
Keep Foreclosures Off Your Record
Going into foreclosure will have a negative impact on your credit no matter what you do. Knowing how to stop foreclosure at the last minute can minimize the damage and get you on the road to recovery.
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