For any property owner with negative equity, there’s no word that brings greater dread than “foreclosure.” Sometimes missing three consecutive payments on your mortgage or receiving a Notice of Default (NOD) may seem to guarantee certain doom. Every three months, almost 250,000 families face foreclosure, just in case you think you’re alone.
Now you’re probably wondering what you can do to stop the foreclosure process after all; the looming foreclosure seems inevitable at this point. If you happen to be in this thick mess, don’t fret. There are a few strategies you can employ to halt the foreclosure proceedings before it crystallizes.
This article will answer the question on most people’s minds as the foreclosure of your property edges closer, “what can you do to stop foreclosure?”
Strategies to Stop or Delay Foreclosure
1. Try to Work Out a Compromise
Before the actual foreclosure proceedings conclude, most lenders would rather settle for a compromise rather than foreclosing your property. It is always advised first to try to work out a compromise that will help you get back on your mortgage payments before the foreclosure. Note, however, that the outcome of this strategy is solely dependent on your lenders. There are no laws that dictate how a compromise should be met.
Bankruptcy will instantly answer “what can you do to stop foreclosure” questions by stopping any foreclosure proceedings. So filing for bankruptcy is an almost sure way to halt the foreclosure proceedings. When you file for bankruptcy, federal law prohibits any debt collectors from conducting any collecting activities for the period of bankruptcy, meaning any foreclosure proceedings by your lender will be termed illegal.
It is, however, worth noting that bankruptcy isn’t a permanent solution to temporary stopping foreclosure but will only buy you time to sort out your financial woes. As stipulated by the law, you are supposed to formulate a concrete plan with your lenders and how best you could fix your current financial issues so that you can proceed with necessary payments. You could always liaise with a bankruptcy attorney to understand more on this matter.
3. Assumption or Lease Option
If you’re lucky enough to have an assumable mortgage, then you can sell off the property and pay the remainder of the loan with the money acquired from the sale. Unfortunately, nowadays most mortgage agreements are “due on sale” meaning you’ll have to clear any outstanding debts before transferring ownership to another buyer.
However, if you put up a convincing case with your lenders, you may be able to have them modify the “due on sale” clause to accommodate the foreclosure situation. The lenders may most likely want to vet the buyer to avoid being in the same defaulted payment situation. You can then proceed to ask for a down payment on the property to clear your mortgage. There are many “we buy houses for cash” companies where you can easily sell your house and get cash for your house to pay off the mortgage.
4. Short Sale
After the filing of a NOD, but before the actual auction, you could always seek a good offer from a buyer. According to the law, the lender must consider it. If lenders are presented with a reasonable short sale offer from a potential buyer, you can sell your home fast and stop the foreclosure process immediately. Most people opt for “we buy homes for cash” enterprises that will give you quick cash on demand. Just make sure you consult with your lender first since a few lenders may not agree to work with some companies.
You mostly don’t expect refinancing to be an answer to “What can you do to stop foreclosure?” because most lenders won’t agree to it. With refinancing, your lender gives you another loan to cover the defaulted payments and get you back on track. You could always talk to your lender to see if they will agree to the refinancing option.
You don’t have to settle for foreclosure when you can try these five “what can you do to stop foreclosure” strategies out first. Remember, you can sell your house to reputable we buy houses in New Jersey companies. If you are willing to do so, then call 732-384-1254 today.