How to Stop Foreclosures

For a variety of reasons many people simply cannot make their mortgage payments, which causes lenders to foreclose on their property. At the time when those people were contemplating their mortgage, the furthest thing on their minds was losing their home to foreclosure. Many people are resigned to the lender taking action while others find ways to forestall that dreadful day.

Instructions

1

Keep your lender from filing a Notice of Default. The last thing a lender wants to do is to foreclose on your property, but he will file a Notice of Default to protect his interests. To forestall this process, you should call the lender in advance of your missing a payment on your mortgage along with a reason why you will be late. After a lender files a Notice of Default, he most likely will be hesitant to work with you to find ways to solve your problem.

2

Work with your lender to find ways to satisfy his needs. For example, you could influence him not to take action for a period of time so you can figure how to return the loan to current status. That is referred to as "forbearance." Maybe you and the lender could agree to your spreading the missed payments over a longer period of time. Or you could ask your lender to extend the period of the loan from, say, 30 years to 35 years, also referred to as a modification of the note.

3

Try to have the lender make you a separate loan to pay back the payments that you have missed. You will find many government-guaranteed loans that allow you to do this, so long as you meet certain criteria. If the lender is reluctant to do this, suggest that your missed payments serve to increase the balance of your loan.

4

Take extreme measures to avoid foreclosure if you cannot catch up on making your mortgage payments or your lender is simply unwilling to negotiate. One way to duck foreclosure is to sell your house. Start by interviewing brokers and gaining some idea about the value of your house. Once you have agreed on a broker, inform your lender of your decision. This will buy you extra time and prevent him from issuing a Notice of Default, if he has not yet done so.

5

Find out if your lender will agree to take less if your house is worth less than what you owe. It is called a "short sale," and while it will affect your credit score it is far better than foreclosure. If your lender refuses to honor a "short sale," suggest that you give him a deed to the property as an inducement not to foreclose on the property.