What Are the Best Foreclosure Solutions?
If you fall behind on mortgage payments or property tax payments, you could be facing foreclosure. This means that your lender or township can seize the property, remove you from the home, and sell it. If you’re currently facing this issue or worried that you might in the future, it’s best to know all your options.
In certain circumstances, foreclosure is imminent. However, there are some foreclosure solutions that you can do that could allow you to stay in your home. Here are the best foreclosure solutions that you can try:
1. Modify the Terms of Your Loan
A mortgage loan modification is one of the most common foreclosure solutions. Your lender can work with you to change the terms of your loan, which can help you catch up on your monthly payments and avoid foreclosure.
The most common way to modify your loan is by lengthening the mortgage term and reducing the monthly payments. You can also lower the interest rate and roll previously missed payments into your current remaining balance.
Many lenders will offer loan modifications directly. Other times, Fannie Mae or Freddie Mac offer external programs to eligible homeowners.
2. Take Advantage of the Redemption Period
The foreclosure process has a specific timespan called the redemption period. This is the period after your home has been sold at a foreclosure sale, but you can still reclaim your home.
You’ll be able to get your home back by paying all the outstanding mortgage balances and any other costs incurred during foreclosure.
It’s important to note that states can have varying types of redemption periods. The rules of the redemption period are often determined by whether the foreclosure is judicial or non-judicial. You can visit the United States Foreclosure Laws website for specific information about your state’s rules.
3. Consider a Deed-in-Lieu of Foreclosure
If you want to avoid foreclosure proceedings, consider opting for a deed-in-lieu of foreclosure. This legal process involves turning the home’s title over from the homeowner to the mortgage lender. As the homeowner, you’ll no longer be required to pay the remaining mortgage debt. This is a good option if you have little to no equity in your home and can’t afford the monthly payments.
Before beginning the deed-in-lieu of foreclosure process, talk it over with your lender. Ask them if it will waive any deficiency (the difference between your home’s value and what you still owe). If there is a deficiency, the lender can seek a judgment to try and collect it even after you no longer live in the property.
4. File For Bankruptcy
In some cases, filing for bankruptcy can be a solution to take to delay a foreclosure or save your home. When you file for bankruptcy, the court will issue what’s called an “automatic stay.” It will require the mortgage holder stop all foreclosure proceedings and activity. Even if your home has already been scheduled to be sold, the sale will be legally postponed for 3-4 months. This will give you time to take action and make your plan.
One of the best parts about filing for bankruptcy to avoid foreclosure is that the automatic stay will stop the foreclosure process immediately. However, whether or not this solution is a temporary or permanent fix will depend on if you file bankruptcy under Chapter 1 or 13.
When you file for Chapter 7 bankruptcy, you won’t be offered payment plan to catch up on your mortgage payments. So, if you’re already behind on paying and are trying to stay in your home, this chapter isn’t the best option for you. With Chapter 13 bankruptcy, automatic stay will give you the time you need to catch up on those payments. You’ll repay bills over 3-5 years and pay your monthly mortgage and delinquent payments in full. During this time, your lender can’t foreclose on your house unless you stop making these payments. So if you keep paying on time, you’ll be able to stay in your home.
5. Pay the Reinstatement Fee
If you’re facing foreclosure, mortgage reinstatement is one of the quickest ways to get your loan back on track so you can stay in your home. When you miss payments on your mortgage and it’s in default, your lender can move forward with foreclosure. However, the silver lining is that federal law requires lenders to wait 120 days before officially starting the foreclosure process. This gives you time to take action.
Mortgage reinstatement will allow you to restore your mortgage after it’s in default. You’ll do this by paying the total amount of money that’s past due. You’ll catch up on your missed payments and cover any late fees you’ve inquired. If you catch up and pay back all this money within your 120 day time frame, your defaulted mortgage will receive a clean slate and you’ll be able to stay in your home (granted you continue to make your monthly payments payments on time for the remainder of the loan term).
6. Creative Foreclosure Solutions With Renewed Homes
Are you worried that you’ll lose your home to foreclosure? Renewed Homes is here to help. We know this can be difficult, so we’ve created solutions to keep homeowners in their homes.
Renewed Homes has created an affordable solution to help you avoid foreclosure by paying your reinstatement fee and building your credit. We’ll pay your reinstatement fee on your behalf within 24 hours, which will keep your mortgage loan current, and, in return, you’ll avoid foreclosure!
We don’t charge any interest. Instead, we charge a small margin upfront and offer an interest-free payment plan to pay us back over time! Plus, we’ll help you rebuild your credit over time so you can be set up for success in the future.
If you’re interested in Renewed Homes’ foreclosure solutions, call us at (269)-362-0931.
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