If you are facing foreclosure, you need to remember that you are not alone. Regularly, thousands of people fall into some mortgage delinquency. Homeowners who want to stop foreclosure normally dread dealing with the facts that got them in the situation. When looking to stop a foreclosure sale, there are strategies that you can use to stop the foreclosure process.
File for bankruptcy
If your foreclosure date has been set, you can stop the foreclosure by filing for bankruptcy. Once the filing has been made, an automatic stay is enforced, which puts the foreclosure on hold during the bankruptcy process. Foreclosure is normally deliberated a collection activity and when the lender is notified about the bankruptcy, the foreclosure process will effectively be halted.
Apply for a loan modification
You may not want to wait for the last minute. To stop foreclosure, you may apply for a loan modification, because the bank could be restricted from dual tracking. A loan modification is a change done by the lender to your existing loan terms due to non-payment. When your loan modification is approved, the foreclosure will be stopped permanently as long as you maintain the modified payments.
Deed in Lieu
A deed in lieu of foreclosure is exactly what it sounds like. It is when the lender provides you an opportunity to transfer the deed back to them voluntarily. It is essential to know that the lender may not accept the offer because of the potential liability. A deed in lieu is virtually never granted unless foreclosure is imminent.
Even if you are at the pre-foreclosure stage, you can sell your house. Before the lender schedules an auction and after they have filed a NOD, if you find a buyer, the lender should consider it. In case of a foreclosure, the lender will turn and sell it; if you issue them a short sale offer, they may look at it as saving effort, time and trouble of getting a good buyer in a soft market.
To help you settle on the best strategy, it is best to talk to a professional.
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