Evelyn Brueder has done an excellent job of laying out in a concise manner the options that Homeowners have in avoiding a foreclosure. There is always a way to find relief in a foreclosure. Joy
Today we want to pick up the conversation with some alternatives to foreclosure. This list is just part of our overall Foreclosure Resources that are available for free on our website.
Other Alternatives to Foreclosure
A reinstatement is the simplest solution for a foreclosure, but often the most difficult to achieve. The homeowner simply pays the total amount past due (including late fees) to the lender.
A mortgage modification involves the reduction of one of the following: the interest rate on the loan, the principal balance of the loan, the term of the loan, or any combination of these.
Also known as a "friendly foreclosure," a deed-in-lieu allows the homeowner to return the property to the lender rather than go through the foreclosure process.
A forbearance or repayment plan involves the homeowner negotiating with the mortgage company to allow them to repay back-payments over a period of time.
Rent the Property
This option does not require lender approval, but does require the homeowner's ability to rent the house for enough money to cover the monthly mortgage payment.
Servicemembers Civil Relief Act
If a member of the military experiences financial distress due to deployment-and their debt was entered into prior to deployment-he or she may qualify for relief under the Servicemembers Civil Relief Act.
Many believe bankruptcy is a "foreclosure solution," but this is only true in some states and situations. Entering bankruptcy can be a risky and costly process. Be sure to seek the advice of a qualified bankruptcy attorney when pursuing this as an option.
Refinancing means you will acquire a new loan based on your current credit standing. If you have already missed mortgage payments, your credit score may make it difficult to find a loan with cheaper payments. Knowing that foreclosure can be avoided gives you the ability to develop a realistic strategy to plan for a future that is both financially stable and full of hope