Real Estate

 

How To Stop Foreclosure

 

 

 

 

 

 

 



Currently the mortgage business is reeling. In recent months, both small and large mortgage companies have been collapsing as private investors and lenders have shut off the flow of cash to make mortgage loans. As noted, some of the top lenders in the nation have filed bankruptcy.

HomeBanc filed for Chapter 11 bankruptcy in August 2007
First Magnus Financial Corp., a national mortgage lender shut down its lending operations on August 16, 2007
In August 2007, Countrywide, the largest U.S. mortgage lender borrowed $11.5 billion to help weather the current financial crunch.


Due to our volatile and somewhat unstable economy, foreclosures are at an all time high. If you are facing this difficult situation, the REO Dr is going to provide you with all of your available options. Consider them carefully and remember to consult with professionals, (i.e., attorney, CPA) before committing to any option.

  

Make Up The Back Payments

The quickest way to stop a foreclosure is the obvious; make up back payments. If you can come up with the funds (including the late fees and legal expenses) this will automatically halt a foreclosure.

 

Make Payment Arrangements With Lender

Many lenders will negotiate a deal with you to take what you owe them and pay it over a few months in addition to your normal mortgage payment. This option means that your payment will increase for a few months. ALERT; only take this option if you KNOW you can afford your current payment plus the additional payment.

 

Refinance

Talk with your lender about exercising this option. Or contact our recommended lender, Banker’s Secrets. If you have enough equity, this option could actually lower your payments!

 

Restructure Your Note

In order for a lender to allow you to exercise this option, you must be able to prove that you have resolved the issue/situation that caused you to fall behind. Oftentimes lenders will take what you owe and add it on to the end of the mortgage in the form of additional payments. The caveat; depending on how the note is restructured, the interest rate could go up and/or your payment could go up.

 

Use Equity Line of Credit

If you are able to obtain or have a line of credit with your bank or if you qualify for a home equity loan, either of these options may give you the cash you need to bring the mortgage current and stop the foreclosure process. DULY NOTE, this will make your payments higher than before; if you can’t afford the increased payments, you’ll need to forego this option.

 

Seek Mortgage Relief Assistance

Some government organizations and charities will give you the money to bring your mortgage current and stop foreclosure… provided that you can prove to them that your situation is a one-time deal.

 

Obtain Funds From a Relative or Friend
Facing foreclosure is not a time to walk in pride. If you have a family member, relative or friend who can loan or grant you the necessary funds to halt the foreclosure, ASK THEM!

Use the CCCS

The CCCS, which stands for Consumer Credit Counseling Service, is a nonprofit agency that provided housing counseling for people behind on their mortgage payments. At the REO Dr, we reccommend contacting the CCCS to help you analyze you options.

 

Use a Debt Relief Agency

Debt relief agencies are better alternative to bankruptcy. Essentially, they negotiate with all of your creditors/lenders and have been successful in stopping foreclosures. Duly note, do your homework before hiring an agency

 

LAST RESORT OPTIONS


This next set of options should be considered only as a last resort. Only use them if you are unable to exercise any of the above options.

 

Sell Your Home

If you have the time, (i.e., foreclosure auction date is not looming) and your house is in good condition, putting it up for sale with an aggressively successful real estate agent could be your best option. This will protect your credit rating from a foreclosure and you may possibly walk away with some cash provided that you have sufficient equity.

 

Negotiate a Short Sale

This is when you negotiate with the lender to accept sale proceeds that aren’t enough to cover the loan balance owed. Normally the lender would sue for the balance, but with a short sale the lender accepts the “short sale” as payment in full. Remember to consult with a Real Estate attorney before attempting to exercise this option.

             

Deed in Lieu of Foreclosure

Some lenders will allow you to give the house back to them in order to stop foreclosure. The caveat is that this maneuver will reflect negatively on your credit reports.

 

Obtain a Hard Money Loan

This last resort option should only be exercised if you know FOR SURE that you are coming into some money rather quickly. The points, fees and interest charged by hard money lenders will be costly. In addition your payments will be higher.

 

Sell To a Private Investor

Private investors such as the REO Dr can purchase your home in as little as 3 days provided that we have all of the necessary paper work. By selling to a private investor, you stop the foreclosure process and protect your credit.

 

Use Legal Filings

Although we don’t condone this option, your attorney may be able to halt the foreclosure process for quite some time by bombarding the lender with legal motions.

 

File Bankruptcy
NOTE: This is a last resort measure; before exercising this option, consult with a qualified attorney. BE ADVISED; some loan contracts have legal verbiage that essentially shields the lender from bankruptcy proceedings. Meaning, they can still foreclose on you in spite of the bankruptcy filing.

 

Again, in using any of the above options, whether they be last resort or not, use caution and good judgment and always consult with professionals prior to signing any legal documents.  

 

Source: Harold Becker, REODr.com

 


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