Only someone who has been through the trauma of losing a home can understand the feelings or range of emotions that distressed home owners experience. They are normally too upset or confused to consider their options clearly and as a result do nothing. They suffer from countless sleepless nights and hope how the whole situation will fix itself. As a result they hesitate to contact the bank or the lender to work out a solution to their own unfortunate predicament.
There are various ways that homeowners in this situation can stop or delay the foreclosure process. The information that follows is simply that… information. If you need help, seek the advice of the professional who specializes in foreclosures.
What is the very first thing that the homeowner must do if they find they cannot make the house payments? Contact their lender even if they end up losing their property. Why? Because Foreclosure is possibly among the worst things that can impact your credit score.
One of the first options available to distressed homeowners is to try reinstating the mortgage. This is why it is necessary for the homeowner to contact the bank or the lender as soon as possible in the foreclosure procedure. They need to verify that reinstatement is an option. Reinstating the mortgage would mean paying all missed obligations and any late fees. This could mean a brand new loan, refinancing with a mortgage company or perhaps a revised payment schedule using their lender.
The next option would be to contact the lender requesting a loan forbearance. The lender may then agree to delay payment for a short period or enter a partial payment arrange for a certain period on the condition that they manage to make up their payments with a specific date.
The financially distressed homeowner may also contact the bank or lender about Mortgage loan modification or Repayment plans. The mortgage modification plans consists of adding past payments and late fees towards the total loan amount and the homeowner pays off the sum over the life of the mortgage. A repayment plan consists of including a payment of the portion of the overdue amount using the regular payment until the overdue amount is retrieved.
These propositions are unlikely to achieve success unless the circumstances surrounding the income of the homeowners change. If they are already having trouble making their monthly mortgage repayments how can they be expected to make higher payments.
Another option is for that homeowners to cut their losses and offer the lender a deed in lieu of foreclosure. This may be the possibility if the homeowners have no hope of recovering in the predicament they find themselves and have little of no equity in their property. They agree to give the property to the bank or the lender as well as thereby side-stepping, what could be, a public humiliating foreclosures process.
One more option with regard to distressed homeowners is submitting for bankruptcy. Bankruptcy temporarily halts the foreclosure process. It is not the perfect situation as the process would put a huge dent in the credit score of the homeowner. It is an option when the homeowner needs time to restructure their debt and formulate a bankruptcy intend to make up back payments and continue with monthly mortgage repayments.
We cannot always control the curve balls which life throws at us. There are times in everyone’s life when we are placed in rather unpleasant situations. Most of the time it’s not of our doing and we must learn to deal with them. The above information provides some of the options available to delay or stop the foreclosures process. If you find yourself with this position and facing foreclosures, contact the bank, lender or a mortgage professional as quickly as possible. It is better to manage the problem sooner than later. Remember the longer a person leave it, the fewer your choices.