Having your house foreclosed is extremely stressful, especially when you are still living in the property. There are options to stall the foreclosure or to stop it. The most important thing you need to do when your home goes into foreclosure is to contact an attorney to assist you with filing a response with the Court and preserve your rights. Even with the Court action, there are still many direct options you have with your lender that you should explore.
Renegotiate/Modification
More and more, the most common resolution is to work out a formal loan modification or forbearance plan directly with your servicer. It is essential that you contact your lender to see if your loan may qualify and then to get them the paperwork for review. Make sure to keep copies of all correspondence you send and maintain regular contact with your lender.
Once your paperwork is reviewed, your lender will contact you in writing with a modification or forbearance plan. Most of these plans require a brief trial payment plan of three months before the long-term modification is offered. Â It is very important that in addition to talking to your lender to speak with an attorney who understands the rules and regulations of modification to make sure your lender is reviewing your loan properly.
Reinstatement
Before your house actually is sold at a foreclosure action, you have the option to reinstate your loan. You can do this by making back payments and taking care of any charges that the bank has assessed. You need to contact your lender and/or their attorneys to get this reinstatement figure and instructions as to where to send payment. If you are simply too in debt to make this happen, you should turn to a bankruptcy attorney to discuss your situation. Unfortunately, many borrowers find themselves too deep in the hole to make significant changes before going to a foreclosure. This where the automatic stay provision of bankruptcy can halt your foreclosure.
Sell The House
If you don’t believe that you can salvage the house due to the amount of debt, you may be able to sell the property. If you have enough equity within the house to be able to pay off the entire mortgage, opting to sell the house is a good alternative so that you can keep your credit score safe. This is also very beneficial if you plan to buy another home in the future. Sadly, some people don’t want to lose the home that they are living in, which is why they should consider the above options of renegotiating and reinstatement.