It’s normal to be panic-stricken upon receiving a foreclosure notice due to your missed mortgage payments. However, it is possible to stop or delay a foreclosure by applying the right strategy.
You can work with a loan modification company or follow the right loan modification tips to get your mortgage loan modified. You can also contact the bank directly or hire an attorney to get help with the process. There are different methods for a loan modification, including interest rate reduction, readjustment of the terms of the loan payment, and refinancing among others. A loan modification company can help you prove to the bank that you are capable of handling the new terms of payment.
Refinancing or Taking a Second Mortgage
This option can be considered by a homeowner who has some equity in the house. You can ask the bank for a second mortgage loan and consequently get a lower payment and use the cash received to pay for the months missed. Before taking a HELOC, you should be sure of your capability to make payments because failure to this can result in a foreclosure.
File for Bankruptcy
There are different chapters of bankruptcy that you can file for in court. You can qualify for chapter 13 of bankruptcy which is “reorganization;” i.e., you can continue to make your payments after a period. Chapter 13 of bankruptcy, which is forgiveness, is mostly unachievable if you have an asset like a house. Filing for bankruptcy is only a short-term solution and it will also affect your credit score. So you should put these into consideration before choosing this option.
Other options for avoiding a foreclosure include selling your house, signing a deed-in-Lieu of foreclosure, increasing sources of income and having a pre-forbearance sale among others. The thought of losing your home can be overwhelming, so visit loanmoddepot.com to get help in avoiding the foreclosure process.