Several Ways to Stop Foreclosure

by | May 7, 2016 | Lawyers

During the legal process of foreclosure, a mortgage lender seizes a person’s property to repay a loan. After the foreclosure is filed, however, the lender does not necessarily have the right to seize the property. Below are several ways for homeowners to halt a foreclosure.

Avoiding Foreclosure with the Lender’s Help
Contrary to popular belief, banks and lenders want borrowers to stay out of foreclosure. Continued principal and interest payments are more valuable to a lender than a home is, and if the borrower communicates with the lender before the situation gets serious, the lender will be more willing to offer alternative options for repayment.

Homeowner Tips to Prevent Foreclosure
There are multiple options homeowners can use to stop the foreclosure process.

  • Short refinancing: These plans are offered by lenders, eliminating part of the debt, and refinancing the remainder of the loan.
  • Short sale: The homeowner sells the home for less than the amount of the loan. The proceeds go to the lender and the rest of the debt is eliminated.
  • Repayment plans: The lender offers these plans as a way for homeowners to get back on track after falling behind temporarily.
  • Loan modification: Some lenders are willing to modify loan terms and accept lower payments.
  • Forbearance: Here, the homeowner can gain additional time to pay by asking the lender for a temporary forbearance.

Fighting Foreclosure
If a homeowner decides to stop foreclosure, they can take several steps. The first is to offer a written response to the foreclosure document, selecting a suitable defense. If the lender cannot produce the promissory note, the process may be delayed or stopped and a homeowner can sell the home before the foreclosure process concludes. A lawyer can help a homeowner question the title chain on the home, or negotiate with the lender for a deed in lieu. A final, more drastic option is to file for bankruptcy to stop the foreclosure process automatically.

Should a Borrower Consult an Attorney About Foreclosure Issues?
Financing a home or land can be one of a person’s most important investments, and facing the risk of losing that investment can be frightening. A foreclosure lawyer with can inform clients of their obligations and rights concerning the foreclosure process, and they can review finance documents and offer strategies to stop foreclosure.

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