Foreclosures are unfortunate, and they affect thousands of people each month. Several factors contribute to a foreclosure. Homeowners can lose their jobs, become ill or deal with other unexpected situations. Foreclosures are a costly and lengthy process,; and mortgage lenders are normally prepared to work out an agreement. A new arrangement can put an emergency stop on a foreclosure, and the homeowner can remain in his property, or at least salvage his credit history.
Instructions
1. Attempt to rent or sell the property. The quickest way to put an emergency stop on a foreclosure is to immediately sell or rent the home. Because the housing market is slow, many properties sit on the market for several months. In this situation, homeowners might rent the property to another family or consider a lease-to-own option.
2. Apply for a mortgage refinance. Homeowners who are unable to afford their present mortgage payments can apply for a mortgage refinance to obtain a lower interest rate. A lower or fixed rate can reduce your monthly payment and put a stop to foreclosure. You will need upfront cash for an appraisal. However, mortgage lenders normally wrap the settlement fees into the new loan amount.
3. Get a loan modification if you don't qualify for a refinance. Ask your mortgage lender for a mortgage modification. This process is similar to a refinance. However, homeowners don’t apply for a new home loan or wait for an approval. The mortgage lender agrees to modify the current loan by reducing the interest rate or monthly payment or extending the loan term.
4. Ask for a short sale. Declining home prices can result in an upside-down mortgage loan. In other words, a borrower owes more than her home is worth. To put an emergency stop on a foreclosure, contact the mortgage lender and request a short sale. This allows a homeowner to sell her property for less than the balanced owed.
5. Inquire about a deed-in-lieu of foreclosure. If unable to make mortgage payments or sell the home, you can voluntarily give a property back to the mortgage lender. In turn, the mortgage company forgives the debt. A deed-in-lieu of foreclosure can negatively impact your credit score, but the damage is less than an actual foreclosure.
