What You Can Do To Stop Foreclosure Sale
The truth is that if you are not paying your mortgage as you agreed to do, the bank has the right to take your house. It is as simple as that. They are not required to work with you in order for you to keep your house. Perhaps it is unfair but it is the truth. So your first course of action to stop foreclosure sale should be to try to work with your bank. Finding out possible options before you contact your bank can help you have a more productive conversation.
If you are currently unemployed but actively looking for work, ask your mortgage company if you can have a forbearance. In this situation, your lender will agree to temporarily halt foreclosure proceedings while they give you a set amount of time to catch up on your mortgage payments. Ask them if they will waive late fees and any other fees during this time. If you think you can get a new job and get current with your mortgage payments within the timeframe that the bank gives you, this is a good option. Sometimes with a forbearance, a lender will even temporarily stop the mortgage payments due them for a certain amount of time and allow you to resume making mortgage payments after you find work.
Deed in Lieu of Foreclosure
If you cannot make your mortgage payments and the change to your financial situation is a permanent one, consider offering your lender a deed in lieu of foreclosure. In this situation, you offer to give the house to the lender in exchange for them not foreclosing on your home. This helps protect your credit by keeping a foreclosure off of your credit record and you are able to stop foreclosure sale. You will have to move out of the home but if you cannot afford the payments anymore, a foreclosure would force you out anyway. If your home is underwater, you owe more on the mortgage than what it is worth, the lender may or may not agree to this. Foreclosure is an expensive process for the lender so they may agree just so they don’t have to go through the foreclosure process.
If you lost your job and had to take a job at a lower salary, a loan modification might be the right course of action for you. It can also work for you if you’ve been through divorce and cannot make the loan payments on the home. A loan modification can help lower your monthly mortgage payments on the home. Before you agree to this option to stop foreclosure sale, be sure that you can afford what the new payment will be. Calculate your income and expenses over the past several months, making sure to exclude your current mortgage payment, to get an average of what you spend and what is leftover at the end of the month. This should give you the mortgage payment that you can actually afford.
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