There were over 2 million foreclosures in 2012, down from the year before where the numbers inched toward 4 million. Foreclosure is one of the scariest things a homeowner can face, and many think once the process is underway, that there’s no way to stop it. Being able to stop a foreclosure can be difficult to stop once the process has been stated, but there are some things you can do in this late stage.
Contact your lender
Ideally you should be contacting your lender before you get to the Notice of Default (NOD) point, but once you get the notice, it’s definitely time to make the call. Your lender can help you figure out where to go next and fill you in on what your options are.
Contact a foreclosure counselor
When you want expert help and your lender isn’t exactly being super supportive, contacting a foreclosure counselor can be a big help and can often work with your lender on your behalf to try to get things straightened out. Call the U.S. Department of Housing and Urban Development (HUD), and they can point you in the right direction for finding you a reliable counselor in your state.
Catch up on your payments
It’s still not too late to catch up on the payments that you owe. Laws vary, so you have to check out what they are where you live, but some states will stop a foreclosure once they have received the money you owe them. Should they allow you to catch up on your payments, the time frame in which you can do so also varies. For more information on the foreclosure laws where you live, check out Foreclosurelaw.org.
Expand on your future payments
Depending on your particular situation, your lender may allow you to take your missed payments and spread them out over a long period of time. Rather than pay your current monthly mortgage payment, you’ll pay more per month, but it could help you stay out of the foreclosure hole. However, should you try to go for this particular arrangement, you will likely have to prove hardship, such as a job loss.
Sell your home
Selling your home likely isn’t your favorite option, but it could be one that keeps foreclosure off your record. Contact a real estate agent, your lender, and a foreclosure counselor to find out what your options are and how much you could get for your home. Don’t panic and rush to find an agent, ask for referrals from family and friends to locate one who is reputable.
File for bankruptcy
While filing for bankruptcy is an option, it should be a last resort. Until the court says otherwise, bankruptcy halts the foreclosure process in its tracks, prevents debt collectors from hounding you, and even forces your lender to stop going after you for money. Filing for bankruptcy essentially gives you time to get your finances in order, and in the process, possibly save your home. However, the key is proving that you have income coming in.
Consider a short sale
A short sale is when you sell your home for less than what you owe on the rest of your mortgage. You can do a short sale once your lender files a NOD as long as you get it done before the auction gets underway. Your lender not only has to agree to it, but you also have to be eligible, such as claiming long-term hardship.
When you’re facing foreclosure, it’s easy to panic, give up, and throw in the towel, but you have so many options right in front of you that could get you out of the hole. All is not lost; you have the ability to save your home, all you need is a little faith, a good amount of research, and a lot of effort. Work with the right people and you may be able to get yourself back on track and keep your home.