**This guide is for educational purposes only and is not to be seen as legal advice. Consult with a legal expert before you make any decisions with your foreclosure.**

How to Stop and Avoid Foreclosure in Today's Market  

​This Guide Aims To Help You… Navigate the foreclosure process / Discover all of your options / Find the solution or solutions that may help you stop or avoid your foreclosure / And gain control over your foreclosure situation from here on out!   

It’s no surprise that millions of Americans are losing their homes to foreclosure. News outlets report daily on the economic downturn, record unemployment rates, and the drop in housing prices as the real estate market levels out.

Not paying your mortgage – no matter the reason – will red flag your account and can eventually lead to foreclosure proceedings. Even though homeowners certainly never plan on being delinquent on their mortgage payments or losing their homes, hope is not lost.

Losing a home is stressful and scary, but there are ways to avoid foreclosure so you won’t ruin your credit score or have a foreclosure on your record.

Educating yourself is critical to understanding the process, finding resources to help you, and learning about different solutions to foreclosure. The key is to take action rather than sit back and wait for someone to come to rescue you.

When Life Hands You Lemons, Call Your Lender!

Homeowners default on their mortgages for a variety of reasons, but the most common ones are:

•        divorce

•        sudden unemployment

•        death/illness in the family

•        the inability to pay an adjustable interest rate that increases

Mortgage lenders understand people's hardships and prefer not to initiate foreclosure proceedings. However, their main goal in this business is to protect their clients' assets, which are their homes.  Obviously, the best solution for all parties involved is to avoid this process altogether. (We can evaluate your situation to see how we can potentially help you avoid foreclosure altogether.) So, if you expect you can’t make a payment, call your lender immediately.

Do not be embarrassed, ashamed, or think you’ll pay extra next month. One missed payment is all it takes to signal the lender that there might be a problem.

Here are some possible resolutions your lender might consider:

1.       Forbearance – Lenders might consider giving you extra time before taking legal action to work out a payment plan that you can afford.

 2.      Repayment Plan – This option adds a small amount to your current monthly payments for a specified period of time until the amount of the missed payment is collected.

3.       Note Modification—Your lender might consider changing the conditions of the loan, such as freezing the interest rate for an adjustable mortgage or extending the length of the loan.

4.       Partial Claim—Some government loans can be used to pay back missed mortgage payments, but certain lending criteria must be met.

5.       Debt Forgiveness – If you can develop a plan to be current with your loan after this missed payment, your lender might forgive or waive this missed payment. Keep in mind, however, that this option rarely happens.

Understanding the Foreclosure Process

Okay, if you already know the foreclosure process and exactly how it works... go ahead and skip this section. However, knowing the foreclosure process well can help you more effectively avoid foreclosure or get your property sold more quickly at a fair price.  So... here we go... Pre-foreclosure is the preliminary stage of the foreclosure process before legal filings are made by the lender. This is the optimal time to stop a foreclosure because, at this point, your credit rating will not be affected. Some options are to speak with your lender, put your home on the market, or find a private investor who is willing to purchase or take over the existing loan.

The actual foreclosure process begins when the lender files a Notice of Default. This public record filing indicates where the home is located, that the homeowner is behind in payments and that the home might be seized. In some states, the notice is also placed on the house's front window.

Each state is different in terms of how quickly a Notice of Default is filed. Generally, lenders will wait 60 days from the missed payment date before filing. During this time, you can work with them to make up the payments or find another resolution.  After the filing, the lenders must generally wait 91 days before selling or auctioning the property. During this respite, you can still work with your lender or maybe find another source of income to help make up the back payments. After this 90-day period, notice runs in the newspaper for upwards of 21 days, alerting the public to the possibility that the home will be available for sale or auction. Once the house has been auctioned off, the previous tenants are required to move out unless a rental agreement has been made between the new owners and the previous owners.  As you can see, the foreclosure process can move quite rapidly, depending on your state’s timetable for filing. Once the Notice of Default is filed, your options as a homeowner are limited, which is why it’s imperative to contact your lender PRIOR to them filing the notice.

Ways to Stop a Foreclosure

In the event that your lender won’t work with you, there are other options to stop the foreclosure proceedings. However, you must act quickly and really do some research to know which option is best for your situation.

​ 1.       Sell Your Home – Speak with experienced real estate agents who are familiar with your area's home prices to get an accurate market analysis. Although listing with a discount broker might sound like a reasonable way to save money, interview different agents and find one with strong marketing and sales experience. A discount broker will not save you money if they can’t sell the home before the foreclosure process ends.

2.       Will Your Lender Consider a Short Sale – If your home is worth less than what you owe on the loan, you might be a candidate for a short sale. Basically, your realtor will need to negotiate with the lender to see if they would be willing to take less than the full amount due on the loan. Keep in mind that this DOES affect your credit just as a foreclosure would and not all homes qualify for short sales.

3.       Sign a Deed-in-Lieu of Foreclosure – This essentially means the homeowner is signing the deed to the home back to the lender, thus closing out the loan and stopping foreclosure proceedings. Again, this affects one’s credit the same as a foreclosure, but you might even negotiate terms to stay in the home or rent the home for a lower price until the home is sold.

 4.      Chapter 13 Bankruptcy – If these other avenues fail to stop the foreclosure, homeowners can file Chapter 13 bankruptcy, which legally puts a stay on the foreclosure. At this point, all creditors are legally bound to stop their collection efforts, including selling the home in the foreclosure process. However, there are some exceptions, and homeowners may still risk losing their homes, but an attorney can help explain the legalities.

Of course, if the lender won't work with you and you're unable to stay in the home... your options are a bit more limited... but there is still hope to save your credit rating, save your money, and get you out of your situation without hassle. I can evaluate your situation and explain in clear, easy-to-understand terms exactly which options are realistic and what each option can do for you and your family. Just contact me and tell me a bit about your property. From there, I'll get back to you within 24 hours with a clear explanation of what will help you reach your goals in your specific situation.

Resources to Help You Avoid Foreclosure

After speaking to their lenders, homeowners should look for local resources to help determine the best course of action. Some local resources may be:

•        A local realtor – they may know good information about your particular area the best.

•        A local attorney to make sure state and local laws are clear.

Also, homeowners should make as many calls as possible rather than playing the waiting game. For instance, if your lender takes 5 or more days before letting you know if they will work with you, you could have made dozens more phone calls doing research and setting up an alternative course of action.

The US government also offers various forms of help to homeowners. Its website has links to various HUD-approved housing counseling agencies that can help you avoid foreclosure. Certain homeowners may also be eligible for the Making Home Affordable loan modification or refinancing program.

In Closing

It’s very easy for stressed-out homeowners to become overwhelmed by the threat of foreclosure and the risk of losing their homes. I've done my best to explain the basics of the process in this report, but if you find yourself in this situation, please seek the help of professionals in your area. If you want a full, no-hassle, no-obligation, unbiased review of your situation, I can lay out in easy-to-understand details EXACTLY what solutions will work for YOUR SPECIFIC SITUATION…contact me anytime. After you provide me with some basic information about your situation, I'll respond within 24 hours with a list of your options and the pros and cons of each so you can make a well-informed decision about what is best for you and your family.

Want Me To Help You Review Your Situation To Lay Out ALL Of Your Options?

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