Foreclosure – What You Need to Know.

How to Save Your Home From Foreclosure

Home owners who are hoping to stop foreclosure often dread dealing with the facts that got them to the place of being in foreclosure. If they think back to when they first bought that home, losing the home was probably the furthest thing from their mind. Few home owners actually plan to go into foreclosure. Having said this, there are ways to avoid the destruction a foreclosure can cause…

Reasons For a Pending Foreclosure

Apart from those who knowingly participate in mortgage fraud with the intention of never making a single payment most homeowners face sudden circumstances that force them to stop making timely mortgage payments.

• Job Loss
• Sudden medical emergency
• Death in the family
• Divorce
• Excessive debt obligations
• Inability to pay an adjustable interest rate increase
• Unexpected major home repair expense

Ways to Avoid a Foreclosure

The best way to avoid foreclosure is to prevent the filing of a Notice of Default. Lenders do not want to foreclose but will file a Notice of Default to protect their interests.

Don’t ignore letters from your lender because those responses will make the situation worse, not better. Depending on your particular situation and hardship circumstances, here are some options:

• Make up your payments.
  Lenders might agree to wait before taking legal action against you and let you work out a repayment plan that is affordable for you. This is called forbearance.
• Forgiving a payment.
  If you can agree on a way that you will be current after missing a payment or two, the lender might give you a break and waive your obligation. This is called debt forgiveness, and it rarely happens.
• Spread out the missed payments over time.
  For example, if your payment is, say, $1,200 a month, the lender might let you add $100 a month to each payment for a year until you are caught up. This is called a repayment plan.
• Change the terms of your loan.
  If your mortgage is an adjustable loan, the lender might freeze the interest rate before it increases or change the interest rate to a more manageable rate. This is called a note modification.
• Add the back payments to your loan balance.
  If you have sufficient equity and meet the lender’s lending guidelines, the lender might increase your loan balance to include the back payments and re-amortize the loan. This is called a refinance.
• Make a separate loan to you.
  Certain government loans contain provisions that let borrowers who meet specific criteria apply for another loan, which will pay back the missed payments. This is called a partial claim.

Ways to Stop a Foreclosure

When the lender files a Notice of Default, your options are limited. That is why it is better for you to call your lender before falling behind on your payments, because lenders are often reluctant to work out repayment schedules after foreclosure proceedings have been commenced.

You will be given a certain time period to bring the payments current, pay the costs of filing the foreclosure and stop the foreclosure. This is called a reinstatement of your loan. If you cannot make up the missed payments and the lender will not work with you, here are a few other options to potentially stop foreclosure:

• Sell Your Home.
  Interview real estate agents to get an opinion of market value and average Days on Market to sell your home. Many sellers feel they need the exposure and marketing that full-service brokers offer, but accepting a Fair Cash Offer from a Cash Home Buyer like APEX is the fastest way to Sell Your Home.
• Consider a Short Sale.
  If your home is worth less than the amount you owe, you might be a candidate for a short sale. A short sale affects credit but it’s not as bad as a foreclosure. You or your agent will need to negotiate with your lender to get lender to cooperate on a short sale. This is called a pre-foreclosure redeemed.