It is hard to work and save up money for the down payment on a home. Then, it is hard to make the payment on time every month for from 15 to 30 years. What happens when a person loses their job or has hours cut, there are serious medical problems for a family member, or a car accident with injuries happens? What do we do to prevent our home from being foreclosed while steps are taken to recover from misfortune?
When a homeowner is behind on their payments, the lender can foreclose on the property. This includes cancelling the loan, forcing the homeowner to vacate the home and selling the home for recovery of the debt.
There is a foreclosure crisis in America due to many factors such as sub-prime loans, overly aggressive lending, loan misrepresentation, instability of the housing market, and emergencies with homeowners. There are ways of preventing foreclosure, but most people don’t know all of them. When a family is concerned that their mortgage provider may be considering foreclosure, they should seek legal help promptly.
Legal Help to Avoid Foreclosure
A law firm may be able to suggest and carry out strategies to prevent foreclosure or to prevent a foreclosure auction sale. Do not wait until it is too late. Get help at the first notice of foreclosure or before when payments have been missed. Some of the tips and strategies to avoid foreclosure include the following.
- The homeowner begins to fall behind on payments. Negotiations with the lender may work to modify the loan to make it easier for the homeowner to keep making payments. The interest rate or payment amount can be modified. The mortgage can be extended.
- A litigated defense may stop the foreclosure action. This needs to take place within 20 t0 30 days of being served with a foreclosure action. This motion to dismiss or filing an answer to the foreclosure action. It can involve going for an emergency order to show cause in the state court. This defense will focus on defects in the foreclosure process.
- Filing for Chapter 13 Bankruptcy will allow for a cure over time for mortgage payment arrears.
- A voluntary sale or a short sale with the consent of the borrower. This solution allows the house to be sold for less than the mortgage amount.
- Refinancing the property may be a possibility if there is equity in the home and the homeowner can qualify for refinancing.
- Chapter 7 bankruptcy is designed to eliminate debt. This action could eliminate credit card, unsecured debt, and personal loan debt freeing money to pay the mortgage payments. This is often combined with mortgage modification.
- Know your mortgage rights. When trouble making payments starts, look up the mortgage documents and read them. Then look up the foreclosure laws and timeframes in your state.
- Consider selling other assets to bring the mortgage up to par and continue to make payments. A second car, jewelry, collections, sports equipment, recreational vehicles, and so on can bring in cash. Consider a second job to bring in additional money.
General Ways To Avoid Foreclosure
The most basic advice in avoiding foreclosure involves acting quickly when a problem happens. Work with the lender before your credit is affected and payments have been missed. Your lender may suggest new programs to avoid foreclosure, so don’t ignore notices from the lender. Seek help from a government low-cost housing counselor and or a law firm.