You might be concerned that the mortgage company will foreclose on your home. Fortunately, there are several things you can do to protect yourself and stop foreclosure from progressing.
1. Inquire About a Deferment
The most important thing to remember if you are trying to prevent a foreclosure is to stay in touch with the mortgage company. That will be your saving grace. You must reach out to them the moment you have an issue keeping up with the payments. A deferral might be an option for you. The mortgage company may postpone your payments for one month or several months. The only thing to remember is that you will continue to pay interest on a deferment. A deferment moves the payments to the back of your loan, and thus, the payments continue to accrue interest. However, the process could give you the opportunity to get back on track.
2. Ask About a Forbearance
Forbearance is similar to a deferment, but it’s a pause rather than a repositioning. You can request forbearance of up to 12 months from your mortgage company. You’ll need to contact them and explain what’s going on in your current situation. When you’re finished explaining it to them, they will let you know whether your forbearance has been approved or denied. An approved forbearance will give you quite a bit of time to get yourself together and avoid foreclosure.
3. Apply for a Loan Modification
You can also ask for a loan modification from your mortgage lender. A loan modification is a reworking of your entire loan agreement with new terms that might be easier for you to handle. To qualify for a loan modification, you must have a justifiable reason for the request. Examples of such reasons are sudden job loss, debilitating illness, or a change in family circumstances. The changes in your family circumstances could be the acceptance of a new relative in the household, the birth of a new child, or a divorce.
A loan modification will require paperwork, and it could take some time before the mortgage company gets back to you and lets you know of a workable solution. Therefore, it’s in your best interest to contact the mortgage company as soon as possible so that they can start the process for you.
4. Contact an Attorney
You may want to consider obtaining the services of a reputable attorney for help with requesting a loan modification. An attorney can also help you with a foreclosure defense because he or she knows numerous strategies to help you. Another type of lawyer you may want to talk to is a bankruptcy lawyer. Sometimes, the only way to stop foreclosure is to apply for bankruptcy. You may be able to add the lawyer’s fees to your bankruptcy if you are filing for Chapter 13. Many lawyers provide free consultations that you can take advantage of if you want some sound advice. The attorney will complete a means test to see if you are eligible for Chapter 7. If not, you may be eligible for Chapter 13, and it can still help you prevent a foreclosure on your home. The difference is that you will have to create a repayment agreement that all of your lenders will need to approve before you can receive your bankruptcy status.
5. Consider Renting a Room
You may want to consider trying to find alternative ways to get money into your household. Renting a room might be a helpful idea if you don’t mind allowing a new person to occupy one of your rooms. You can conduct a thorough background check before you rent your room out to ensure that you keep the situation safe. The money you bring in through the room rental will allow you to catch up on your mortgage very quickly if you’re not that far behind. You might also consider selling some items you no longer find useful in your household.
Stop Your Foreclosure From Progressing ASAP
Now is the time to take some steps to prevent yourself from falling into the trap of foreclosure. You can use any one of the above-mentioned tips or a combination of them all. Try them to see if you can see the light at the end of the tunnel.
Author information: Regina Thomas is a Southern California native who spends her time as a freelance writer and loves cooking at home when she can find the time. Regina loves reading, music, hanging with her friends and family along with her Golden Retriever, Sadie. She loves adventure and living every day to the fullest.