5 Ways to fight foreclosure

The incidence of foreclosure has increased over the years and is still rising. It has been more prominent following the US subprime mortgage crisis. More and more people are trying their best to stop home foreclosure. Home is definitely the most priced possession of your life. You don’t want to lose it at any cost. However, excluding the ones who intentionally get involved in fraudulent mortgage activities, there is hardly anyone who wants to lose his home. However, there may be certain conditions which force you to fall behind on payments. The payment defaults ultimately lead to home foreclosures.

Unintentional late payments may be attributed to the following causes-

• Sudden unemployment
• Medical emergency
• A family member’s demise
• Divorce
• Inability to adapt to new adjustable rate mortgage
• Expenses related to emergency home renovation etc.

Stop home foreclosure If you anticipate that you are likely to face foreclosure, the best thing to do is talk to the creditor and let him know the underlying cause of your current financial status. It is quite likely that the lender will suggest any one of the following ways.

1. Modification of the existing mortgage

The lender (in most cases a bank), agrees to restructure certain terms of the current mortgage. Changes brought about mainly include extending the term of the loan, reducing the rate of interest, cutting down payments related to the principal amount etc. These changes are temporary in nature.

2. Short refinance

You can also get the property refinanced if it is facing the threat of a foreclosure.

3. Repayment plan

If you opt for the repayment plan, you have to pay part of the arrearage. The remaining amount is paid together with the regular payment you are supposed to pay in a couple of month’s time.

4. Short sale

The property is usually sold to a 3rd party. And if it is so negotiated, the creditor takes this as the full settlement payment by the debtor.

5. Repurchase following a foreclosure

You can buy your foreclosed property back after an auction. You can adopt any of the above options to stop home foreclosure.

Foreclosure scams

There are many companies engaged in foreclosure scams. These companies represent themselves as foreclosure experts and consultants. If they are authentic, their credentials will be available at the US Department of Housing and Urban Development. It is very easy for them to find you. When a lender files foreclosure notice, the same is usually communicated to your community. Thereafter, you may receive scores of mails and phone calls from these fake foreclosure consultants trying to trap you.