How to Avoid Foreclosure

Unfortunately, each year millions of homeowners lose their homes to foreclosure because they fail to make their mortgage payments. The good news is that this does not have to occur if you take the needed steps entailed in preventing foreclosure. If you’re worried about having to forfeit your home to foreclosure, here are some ways to avoid this problem.

Consult with Your Lender

Don’t ignore the situation. Contact your lender immediately after realizing you’re may be at risk for foreclosure because you’ve missed a payment. Most lenders don’t want to go through the process of foreclosure as it can cost them considerable time and money.

Stress to your lender that the problem is not permanent, but only temporary. For example, maybe you can’t pay your bills because of unforeseen medical expenses or you’ve lost your job. Most likely, your lender will grant you a reprieve until you get back on your feet. Sometimes, lenders ask for a lump sum payment. If you’re really fortunate, your lender may actually freeze monthly payments. 

File for Bankruptcy

After filing for bankruptcy, what’s known as an “automatic stay” goes into effect straight away. This stops a lender from foreclosing on a home or trying to collect debts. In other words, the foreclosure is halted during the bankruptcy process.

Filing for a Chapter 13 bankruptcy can help in keeping your home as it restructures your debts. This type of bankruptcy allows you to make partial or full repayments of your debts. Therefore, foreclosure may be avoided and you get to stay in your home. This is because you can make your delinquent mortgage payments using a Chapter 13 bankruptcy.

Filing for a Chapter 7 bankruptcy isn’t recommended once you’ve already entered the foreclosure process. But it can delay the proceedings, giving you additional time to live in your home without having to make payments.

Hire a Housing Counselor

You may want to hire a housing counselor who can help you straighten out your finances. What’s more, a good housing counselor can help you devise a workable compromise with your lender to prevent foreclosure.

Just be cautious of any counselor promising to either pause or stop the process of foreclosure. On the other hand, consider that some housing counselors can be expensive. To be safe, find your housing counselor from the website of the Department of Housing and Urban Development.

Considerations and Warnings

• ·       Locate your loan documents to know what will occur from failing to make mortgage payments. Be sure to thoroughly read and understand all terms of the document. If you need help, get counsel from a reliable realtor or attorney.
• ·       Be familiar with your state’s foreclosure laws, as well as the time frames involved.
• ·       Don’t be a victim of foreclosure scams. You should never feel forced into signing documents that says a firm will act in your behalf. If you do, you may be signing over your property title. As a result, you could become a renter in your own house.                                                          

You may need to sell your home. That’s when you need to call the professionals at We Buy Your Austin Home. We will buy your home, at cash, regardless of its condition, situation or equity. Please contact us.