Foreclosures can be amongst the most stressful times for most people. Many times if you have defaulted on too many mortgage payments, you may be left with no other option but to lose your home in foreclosure. While foreclosures can have extremely painful financial repercussions on the borrowers, they also have a seriously damaging effect on their credit scores. Although most people would like to put in their best efforts to stop foreclosure, the recent economic downturn has resulted in extremely hard financial misery for many borrowers who haven’t been successful in doing so. If you own a home and have missed a few payments and recon that you are heading for foreclosure, it is advisable that you immediately seek foreclosure help and try to save your home since the foreclosure process can start very quickly without giving you enough time to chart out a plan of action to deal with it.

It goes without saying that one of the most important things you can do to avoid losing your home and protect your credit is to act quickly. As soon as you become aware of your problem, it is advisable that you contact your lender immediately without even waiting for a notice of default. Acting sooner may give you more time to find a win-win solution for everyone, whether that solution is entering into a loan modification program or selling your home. Even if you can’t avoid foreclosure, at least working with your lender may mitigate some of the damage.

While you may choose from the various options to stop foreclosure, you may either like to proceed on your own or hire a firm to assist you. If you choose to hire a firm, they would generally charge a fee to negotiate forbearance or loan modification on your behalf in order to save your home. While the advantage of hiring a firm can be that you would get professional help, you must still be aware of the fact that the nuances of negotiations are critical to a successful outcome and hence it is advisable that you look for someone who is experienced at foreclosure negotiation. Whether you hire a firm or proceed on your own, it is important that you are presented in a manner that convinces the lender that you are a responsible person and that you are capable of developing a plan and getting back on track.

Some of the options that you may like to evaluate in order to stop foreclosure are as follows:

– Foreclosure Mediation- You may like to go for this service which would negotiate with your lender to repackage the loan so that you can become current again. The process may involve loan modification, payment forbearance or loss mitigation and may be able to help you save your credit, save your home and its equity and appease your lender.

– Deed in lieu of foreclosure – By going in for this option, you can voluntarily give the house back to the lender. While this is contingent to a deficiency judgment, it would generally count as a “less serious” foreclosure on your credit. But the greatest disadvantage of opting for this option is that you would lose your home. Additionally, it may not always be easy to convince your lender to accept this arrangement.

– Sell your house – While you would lose your home in this situation, you may be able to save some of your home’s equity. The disadvantage is that you would generally need to pay a 6 percent realtor fee and since this would be some sort of “distress” sale, you may not receive the full market value for the home. Also, three months from now you may end up not being able to sell your home and having to deal with an additional three payments on your home while still facing foreclosure.

– File for bankruptcy – While this can have serious as well as long term repercussions on your credit as well as your financial standing and reputation, sometimes you may have to consider filing for bankruptcy as an option. This can be a very expensive and drawn out process through which there is no certainty of outcome. It will certainly leave you with a severely damaged credit record and the strong possibility of no home. Yet if you would like to consider bankruptcy as an option, it is advisable that you contact an attorney to discuss the pros and cons.

While there can be various considerations when you try to stop foreclosure, it is advisable that you act fast and educate yourself so that you can plan for the best resolution to the foreclosure process.

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Category: Finances
Keywords: foreclosures, stop foreclosure, foreclosure help