Foreclosure help may be available for financially distressed homeowners to help save their homes from foreclosure. Quite a few foreclosure defense options may be available for homeowners, so it is important to learn about the available options in order to make a well-informed decision.
Foreclosure help options may allow homeowners to stay in their homes while other options may require homeowners to leave. It can be smart to consider the available foreclosure defense options as soon as possible since less options may be available later on in the foreclosure process.
Foreclosure Help Options
Foreclosure help options that may allow homeowners to keep their homes while preventing foreclosure can include:
- Refinance – A mortgage refinance works by obtaining a new mortgage loan to replace an existing one. This may help by reducing interest rates, lowering monthly payments and even extending the life of the loan. This can be a smart foreclosure defense option, but it can be difficult to qualify.
- Loan Modification – A loan modification works by modifying the original terms of the mortgage agreement. In a similar way to a refinance, this can help to lower interest rates, extend the life of the loan and even lower monthly mortgage payments. This can also be difficult to qualify for, but there can be numerous modification programs to consider.
- Mortgage Forbearance –A mortgage forbearance works by mortgage lenders agreeing to suspend the foreclosure process while a homeowner attempts to bring a delinquent loan current. This can be a smart foreclosure help option when homeowners are experiencing only a temporary financial hardship.
- Deed in Lieu of Foreclosure – A deed in lieu of foreclosure works by creating an agreement with the mortgage lender to accept the title of the home as payment for the unpaid mortgage balance in full. This can be a smart foreclosure defense option when the homeowner knows the home is unaffordable and foreclosure is unavoidable.
- Short Sale – A short sale works by creating an agreement with the mortgage lender to accept the proceeds from the sale of a home as payment for the unpaid mortgage balance. This can be a smart foreclosure help option when foreclosure is unavoidable, but homeowners should keep in mind that lenders may choose to file a subsequent deficiency judgment lawsuit.
- Bankruptcy – Filing chapter 7 or chapter 13 bankruptcy can be a potential way to avoid foreclosure and stay in the home. It is important to remember bankruptcy laws can vary from state to state, so it is advisable to speak with a bankruptcy attorney prior to filing bankruptcy.