Foreclosure: How to Stop It Before It’s Too Late

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stop a foreclosure

Facing the problem of foreclosures is difficult and it is not always inevitable. There are many ways to stop a foreclosure and you have to see which option is feasible for you. 

What is foreclosure?

Foreclosure is the legal process for a borrower by the bank or lender when the borrower stops making payments on their mortgage loans. When a borrower uses a mortgage loan facility, he agrees to make monthly payments or installments. If a borrower stops making payments for his mortgage loan due to some financial issues in life, the lender tries to take back his payment in different mutually consented ways with the borrower, and this process of taking money back is called foreclosure.

Ways To Stop A Foreclosure

Make a monthly mortgage payment

The best way to stop foreclosure is to make the payment monthly to avoid hassles with the lender. However, most of the borrowers understand the issue of foreclosure and tries to avoid it as much as possible but due to some financial issues or life uncertain events, they stop making payment and it arises the issue of foreclosure. This is why saving some emergency funds can be extremely helpful for you and can protect you from the unfortunate situation of foreclosure.

Work It Out With Lender

This is a good option if you failed to make some previous payments and work out with the lender and resolve the issue. Your lender may be ready to make out a repayment plan to get your loss on track, provided you promise to follow the revised payment plan regularly. Many lenders in Hawaii understand the borrower’s problems and provide Hawaii’s foreclosure facility. With the repayment plan, the lender will give some payment relief and will settle a particular amount that you can pay to him in future payments. Be sure of your promise as further missed payments will make the situation more critical.

Request a forbearance

Mortgage forbearance allows borrowers to put a hold on their monthly payments to the lender due to their financial troubles for a certain period. During the mortgage forbearance period, the loan provider expects you to get ready to make payments regularly after the mortgage forbearance period. The key thing about forbearance is that you have to make this period’s payments after the period is over. Let’s suppose your mortgage bearing time is 5 months and after 5 months, you are expected to make full payments or in installments as discussed with the lender.

Apply for a loan modification

As you may have guessed that the modification modifies the terms of your current loan. If you are not eligible to refinance, a loan modification can help you in making monthly payments more affordable, allowing you to stay active on the loan and remain in your home. A common modification for the loan is to extend the term of the loan to ease the installments and This may or may not be possible with the lower rates.

Consult A HUD Approved Counseling Agency

If you need expert advice, The HUD Sponsor agencies are there who guide the borrowers about the ways to stop Hawaii foreclosures. These services often provide you with the best services for stopping foreclosures at little or no extra cost. 

Conduct a short sale

If you are not eligible to make payments restructuring option, your lender will not allow you to stay in your home and you have to leave your home. In such cases, one option you have is a short sale. In a short sale, you sell your home for less than what you owe to the lender. The proceeds of the sale are paid to the lender who forgives the remaining amount. You will need to get acceptance for this from the lender to pursue a short sale and if he agrees, then you can continue for a short sale.

Sign a deed in place of foreclosure

Sometimes, to avoid foreclosure, a mortgage company will accept what is called a deed in place of foreclosure which is where you voluntarily transfer ownership of your home to your lender and you don’t have to follow official foreclosure proceedings.

Bottom line

Though it is best if you make your payments regularly with the best efforts you can. In case, you fail to make the mortgage payments, you have to opt for one of the solutions suggested above. If you can make payments later, you should go with a mortgage forbearance or extend the term of the loan but if you are not in a position to make future payments, you can go for a short sale or sign a deed instead of foreclosure. One thing is sure you have to make payments but if you don’t do this, you have to face the consequences and the best way to avoid foreclosure is to be alert before such situations arise.