When a homeowner cannot make his or her mortgage payments, the lender may begin the foreclosure process. This is the process through which the lender takes possession of the property. It can be a long, stressful process for all parties involved, including the lender. Homeowners can avoid foreclosure through a few different
strategies. If you are facing foreclosure, a real estate lawyer can discuss these strategies with you to determine if one or more is a viable option in your case.
Consider Filing for Bankruptcy
Bankruptcy is a way to stop the foreclosure process. It is an extreme choice to make and in many cases, its repercussions outweigh its benefits. If you are facing a level of financial difficulty that you cannot get under control on your own, consider filing for bankruptcy and using the automatic stay to halt your foreclosure. This prevents all of your creditors from making collection attempts while your bankruptcy case is pending.
Negotiate with your Lender
You might be able to work out a deal with your lender that allows you to make late payments or make a lump sum payment after a period of relief. If you are facing temporary financial difficulty, such as a high medical bill or short term unemployment, discuss this with your lender to see if they can work with you. If you have a good payment history, your lender will likely be more flexible than if you have a history of late and missed payments.
You might even consider modifying your mortgage loan’s terms with your lender. If you foresee having financial difficulties for the long term, this might be the right choice for you. Depending on your circumstances, you can potentially extend your loan’s term, reduce its principal amount, or reduce its interest rate to make your monthly payments lower. Again, whether your request is granted can depend on your credit and payment history.
Understand How the Foreclosure Process Works
Educate yourself about the foreclosure process before it begins so you know how to advocate for yourself. In some states, lenders must complete judicial foreclosures, which means the court is involved in each foreclosure case. In others, lenders do not have to work with the court.
The foreclosure process can take months to complete. In certain cases, it is possible for a homeowner to file a lawsuit against his or her lender to stop the foreclosure. Discuss this possibility with your lawyer as well as other potential outcomes for your case, like completing a short sale.
Work with an Experienced Real Estate Lawyer
If you are facing forelosure, do not assume that you will lose your home. You can avoid the foreclosure process by knowing your rights, staying in frequent contact with your lender, and being willing to explore all of your options. To learn more about your options as a homeowner facing foreclosure, set up your initial consultation with a member of our team of real estate lawyers at Moen Sheehan Meyer, Ltd.