If you are late on more than three mortgage payments, your mortgage lender can file a notice of default, which means the foreclosure proceedings have begun. Going into foreclosure is definitely scary. However, being late on payments and receiving a notice of default does not automatically mean that foreclosure will be initiated. Here are 6 options for preventing foreclosure.
1. Negotiating with the Lender
Up until a home is scheduled for sale, most lenders are ready to find a compromise that will allow you to get back on track with your mortgage payments and keep your house. Therefore, as soon as you miss a mortgage payment, it is recommended to contact your lender and discuss a temporary payment plan or loan modification. Keep in mind that your lender may ask you to sell other assets before your monthly payments will be reduced.
2. Filing for Bankruptcy
Once you file a bankruptcy petition, all debt collectors, including your mortgage lender, are prohibited from continuing collection activities. Since foreclosure is a collection activity as well, after filing for bankruptcy, the foreclosure process will be frozen. However, it is important to understand that bankruptcy is not a remedy — it just gives you more time to recover financially from a temporary disability and replace your lost job. According to federal law, mortgage lenders and other creditors must work in good faith with those who filed for bankruptcy and must offer a good repayment plan.
3. Deed in Lieu
Deed in lieu is an agreement where a homeowner voluntarily gives the mortgage lender the deed to their property. Even though it sounds like a good option, it actually has a negative impact on a homeowner’s credit, just like foreclosure does. Usually, mortgage lenders do not like deeds in lieu for several reasons. First, they are afraid that homeowners may sue them later, saying that they did not understand what was happening. Second, a lender wants to be sure that the homeowner’s financial hardship is real.
4. Speaking to a Foreclosure Professional
You can always talk to an experienced foreclosure professional and discuss your options. There are many initiatives and programs aimed at helping homeowners avoid foreclosure. Among them is the Making Home Affordable Program for unemployed homeowners struggling to pay their mortgages and the Home Affordable Modification Program, which helps reduce mortgage payments up to 40%. You can learn about these and other programs from foreclosure specialists.
You can always negotiate with your lender about a new payment plan with new terms and interest rates. The purpose of a new plan is to cover missed payments as well as the amount you owe on your property. The best part of refinancing is that it does not have a negative impact on your credit.
6. Selling the Home
One of the easiest and most efficient ways to avoid foreclosure is to sell your home. However, you should talk to your lender first and make sure that it is possible. If you do this without the lender’s permission, you may end up in significant legal trouble. The purpose of a short sale is to sell your property to get enough money for paying what you owe to the lender. You can also sell your home to a real estate investor, who will buy your house immediately and as is.
Sell Your Home Fast With We Buy Houses Tulsa
If you need to sell your home in Tulsa fast to avoid foreclosure, We Buy Houses Tulsa is ready to help you. We will offer you a no-obligation offer. You can either accept it in order to move forward or decline it. Moreover, you do not need to do anything with your house because we are ready to purchase it in any condition. That means that you do not have to pay for expensive repairs and renovation. If you want to receive money for your house immediately, do not hesitate to give us a call at (918)-739-6777 or fill out a form on our website.