Avoid Foreclosure

Why do you need to avoid foreclosure?
1. Foreclosure has a devastating impact on your credit scores.

Any future application for a mortgage or anything at all that involves the use of credit will be negatively affected.

Many employers conduct a credit check and this can possibly deter them from hiring you.

2. A lender may seek a deficiency judgment against you in order to recoup the losses they incur during the bank sale of your property. Again, this makes you a target of continued collections.

 

What are some ways of stopping a foreclosure?

1. Tap into all the viable options for generating cash-flow such as borrowing from relatives and friends, selling assets, accessing retirement funds, slashing your monthly expenditures.

2. Talk to your lender. A loan modification can be any of several types: forbearance, interest rate reduction, loan extension, principal deferral and many more. Make sure that you can come to an agreement that will result in a lower monthly that you can, in fact, comfortably keep paying.

3. There are other options:

• Deed in Lieu of Foreclosure – It is also called a “friendly foreclosure” where the homeowner just walks away. This option does not protect your credit. The lender would take the property back subject to the junior lien holders which means there is no possibility of a deficiency judgment in the event the property fails to produce enough to cover the outstanding debts after it goes to auction.
• Refinance Your Loan – Take out a second mortgage and shop around for the best loan options. You may be able to save on your monthly payments.
• Short Sale – This has become an increasingly popular option. The lender agrees to accept an amount less than the full outstanding obligation as payment in full. This option does less damage to your credit score than a foreclosure. A qualified Realtor will be able to negotiate with your lender and help complete this process with you.