Foreclosure Defense Strategies

What Are Foreclosure Defense Strategies?

Foreclosure defense strategies include a wide variety of tactics that can be used in an effort to prevent or defend against an impending foreclosure. Foreclosure defense strategies vary greatly based upon the different financial situations homeowners in foreclosure might be facing. Some strategies may allow for homeowners to stay in their homes, while other strategies may require them to sell their homes or turn them over to their mortgage lenders. It is important to consider the different foreclosure defense strategies available as early as possible, because time can limit the availability of some of these choices in certain situations.

Common Foreclosure Defense Strategies

There are six common foreclosure defense strategies to consider when facing home foreclosure:

  1. Loan Modification – A loan modification can be reached by negotiating with your lender to adjust the original terms of your contract including but not limited to the interest rate, mortgage repayment time and principal reduction. This can be a great option to help make it easier for you to make your payments affordable to you and to stop foreclosure.
  2. Mortgage Forbearance – A mortgage forbearance is a strategy that is used to get you current with your mortgage and usually applies the late payments to the end of your repayment plan. This option can be great if you are not facing long term financial instability.
  3. Short Sale – A short sale is a great strategy if you are trying to get out from under your financial obligation with the bank. You can sell your home for its current market value and give the proceeds to the bank as final payment on the home. This is only an option if you are willing to leave your home.
  4. Deed in lieu of Foreclosure – A deed in lieu of foreclosure is a great foreclosure defense strategy. This option is also good if you are interested in leaving your home and losing the mortgage payments. if the bank negotiates with you for a deed in lieu, sometimes the current homeowners are allowed to stay in the home and pay rent to the bank. This can and should be discussed with your attorney so realistic expectations can be set with you depending on your current situation.
  5. Bankruptcy – Home owners sometimes consider filing for bankruptcy but are unsure what will be included in the bankruptcy filing and if they would be able to save their home. Chapter 7 and chapter 13 are typically the only options that you have that may include saving your home from foreclosure. this is usually the last stop on the road to a good foreclosure defense strategy.