Foreclosure Options
Foreclosure Options
Most people facing foreclosure are most concerned about saving their homes. If your primary goal is to stop foreclosure in order to keep your house, then you'll most likely want to consider Foreclosure Mitigation Services which usually result in a restructuring of your current delinquency.
Other options may include refinancing or Chapter 13 bankruptcy.
However, if you know that you can't afford to keep your house and you are looking for a way to avoid a deficiency judgment and minimize damage to your credit, other options to stop foreclosure are available.
Facing mortgage foreclosure is scary, and it can be hard to make informed decisions to stop foreclosure when under pressure.
Make sure that you understand all of your options to stop foreclosure, which may include:
Restructuring Your Delinquency (Mitigation)
Turning over the Deed in Lieu of Foreclosure;
Selling the Property; and
Surrendering the Property in Chapter 7 Bankruptcy.
Learn more about these options to stop foreclosure, and be sure to carefully consider which is best for you and your family.
Restructuring Your Delinquency
This is the most desired strategy if you would like to stay in your home and protect your credit.
In order for you to be able to qualify for this option, you must be able to afford your mortgage. In other words, your current income must be sufficient to meet your financial obligations.
If your delinquency was caused by a one-time event like illness, loss of job or financial mismanagement, this my be your best option.
Deed in Lieu of Foreclosure
May Be an Option to Stop Foreclosure. If you're sure that you can't afford to keep your house, you may be able to reach an agreement with the mortgage holder whereby you simply give it back and stop foreclosure.
The mortgage holder would agree to accept the deed as full settlement and cancel the remainder of your debt.
Whether or not this is a good option to stop foreclosure for you depends upon your equity in the house, the amount of outstanding debt, and what other options are available to you.
Of course, the mortgage holder won't always be willing to enter into such an agreement, but if there is little likelihood that you'll be able to pay a deficiency judgment, the lender may decide that it's better to avoid the costs of a foreclosure proceeding, stop foreclosure and accept the deed as full settlement.
Sell the Property to Stop Foreclosure!
If you have significant equity in your house, selling it is a good option because it may allow you to stop foreclosure and walk away with money in your pocket.
Where equity is limited (or non-existent), it can be difficult to sell the property because of the need to cover the mortgage and the other associated costs of a sale. This is especially true if you're working with a realtor, since you'll have to cover a commission as well.
In some cases, the mortgage holder may agree to a short sale.
That means the lender will agree to accept less than the full amount of the mortgage. This allows you to stop foreclosure and avoid a deficiency judgment, while the lender recovers the bulk of the amount due without having to pursue foreclosure proceedings.
Surrender the Property in Chapter 7 Bankruptcy & Stop Foreclosure!
Unlike Chapter 13 bankruptcy, Chapter 7 bankruptcy does not provide a means to save your house from foreclosure.
The automatic stay entered in most bankruptcy cases will stop foreclosure proceedings, but the Chapter 7 process does not provide a mechanism by which you can catch up on your past-due payments and keep your home.
However, if you've been unable to work out an alternative and you know that you cannot afford to keep your house, Chapter 7 bankruptcy has some advantages.
First, the automatic stay will temporarily stop foreclosure proceedings, giving you time to make necessary arrangements.
Second, a Chapter 7 bankruptcy will eliminate most of your unsecured debt (credit card debt, outstanding medical bills, etc.), so that you may be more able to meet your regular living expenses.
Finally-and perhaps most importantly-Chapter 7 bankruptcy can eliminate any deficiency judgment, so that you don't end up losing your house and still making payments to the lender.
A Foreclosure Expert Can Help You Determine Which of These Options Makes Sense
If you’re wondering whether any of these options can help you stop foreclosure, please consult with a Foreclosure Expert who will be able to assess the available options and advise which is the most suitable .
About the Author: Hi - My name is Dave and I run several websites which are aimed
at beating the credit crunch including avoiding the misery of
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