Steps of Foreclosure

Stop Home Foreclosures

To stop home foreclosures the homeowner must act immediately if there is a problem. The most common cause of a home foreclosure is that the homeowner waits too long to get in touch with the lender or they don't respond to the lender at all once they start receiving late notices.

One method to stop home foreclosures is to contact the lender and make arrangements to renegotiate the original mortgage. You could ask the lender to reduce the interest rate or extend the length of the loan in an effort to reduce the monthly payments. These types of arrangements to stop home foreclosures are typically temporary. If you feel uncomfortable negotiating with the lender, contact a professional foreclosure negotiator for help.

Another method to stop home foreclosures is to renegotiate the balance of the current loan plus any arrearages and legal fees. Ask the lender if they would be willing to take less than this amount. If the lender agrees, you could refinance the new loan amount. For example, if the balance of your current loan is $110,000 and you have arrearages and legal fees totally $20,000. You are liable for a total of $130,000. Negotiate with the lender to accept $90,000 as the total payoff. If the lender agrees, you can refinance the $90,000 which should lower your monthly payments and eliminate $40,000 of debt for you.

In most cases bankruptcy should be your last option to stop home foreclosures. Filing for bankruptcy will allow you to keep your home. You can file for bankruptcy on your own but it is highly recommended that you hire a qualified, experienced bankruptcy attorney. The court will look at all your finances and decide if you own anything of value that can be sold to repay any portion of the debt and will usually establish a reorganization plan. Under a reorganization plan, you will be required to keep up on all payments or you will lose the courts protection and your home will go to foreclosure.

Even if you decide to give the house back to the lender to stop home foreclosures, you need to be aware that if you owe more than the house is worth, the lender could file a deficiency judgment against you. A deficiency judgment is the difference between what the lender will receive when they sell the home and what the balance of your loan is. For example, if you can't stop home foreclosures and the lender takes your home and sells it for $95,000 and your loan balance is $110,000, the lender could sue you for the $15,000 difference plus any legal fees. Before you give your home back to the lender, negotiate with them to forgive any potential deficiencies.