When your loan is in default can you stop a forclosure ?

Question

I am two months behind on my mortgage .

Answer 1

Yes, by coming up with the money, there is no other way.

Answer 2

Yes, you can stop a foreclosure several ways.

(1) Keep your house by bringing your payments up-to-date. That can be done pretty much at any time. Each month your mortgage is not paid, a "ding" will appear on your credit report, which will obviously hurt your credit score for awhile.

(2) Deed in lieu of foreclosure. The first link I provided give a GREAT explanation of how that works. It is important to note that your offer to give the lender the deed in lieu of foreclosure is made in writing. It is also important to note that many lenders may not accept the offer or at the very least wait until you are already 4 months' behind in your payment before they even consider this offer (esp. these days, when they are probably getting a lot of properties back). Remember, they are in the business of lending money, not managing property...meaning they don't want the property back. However, that being said, "deed in lieu of foreclosure" resolution is still better on your credit reporting that an outright foreclosure.

(3) Sell your house to an investor or other house shopper. This could be your best bet, but these days (with all the houses coming on the market), it's getting much harder to do this. Generally, the way it works is this: You find someone who wants to buy a house at a good price. You have a house that will be taken from you if you don't bring it current. So you agree to sell your house to the new buyer, typically at a price below the market value (to motivate him/her interest to buy). Again, typically, you will lose most or all the equity you have in the house (like all the money you put down and any appreciation of the property).

The advantage to you is that you will be relieved of the debt obligation and your payments would be brought current (if you negotiate that amount into the deal). The ever-worsening "dings" on your credit history will also stop once you sell. The DISadvantage to you is that you will lose your equity, but if you go into foreclosure, that will happen anyway. Then, of course, you will have to find a place to rent.

Depending upon where you are, the condition of the house, etc., you might be able to negotiate for some extra cash for moving expenses, etc. Or you might even be able to rent the house back from the new owner! So much of all this depends upon your specific circumstances and, of course, would need to be negotiated.

Hope this helps. Good luck to you.

Answer 3

I doubt that a mortgage holder would foreclose with only 2 months default. Once foreclosure has started it is unlikely that the lender would stop the process. You might be able to pay the default amount and any accrued charges, such as attorney's fees. You may want to see if you could pay the interest of fee and have the past due payments put to the back or rear of the loan. That would bring the loan current. That might be enough to stop the process, however, your best bet would be to talk with the lender directly and see if you can work something out with them. Most lenders don't want to foreclose on your home. Keep in mind that the house would likely be sold to the highest bidder and you would still be responsible for any collection, attorney fees, court costs, etc., should they foreclose. Good luck

Answer 4

Most lenders have a hardship program, especially now since the foreclosures are off the charts. Your lender may re-write your loan for you on a "streamlined refinance". DO IT NOW BEFORE YOU FALL BEHIND MORE!! The bank does not want to own the house. Are they still excepting payments from you? If you work with them (and don't scream at anyone on the phone, if they don't help you ask to move up the chain of command to their supervisor.) They want you to keep they house, foreclosures cost the bank a lot of money. If the house is too much for you to pay for, see about getting the loan re-written and then put it up for sale. You can always downsize. Don't just walk away!

I'm an investor, and I buy houses. If you truly want to sell the property, send me details about it. You can e-mail me through here. Thanks!

Answer 5

Talk to the bank. Be sincere about repaying your loan. I am sure they will work out a scheme or rework the loan to within your means. What they want is your business and money. Forclosure will be their last last resort.

Answer 6

Speak to the mortgage holder, sometimes they will give you 1 or 2 months to catch up.

Answer 7

You are in arrears because of some kind of reason, you need to fix the reason why you are in arrears and bring the loan current, however there are times in where it is difficult to get back on track due to uncontrolable circumstances such as sickness, loss of job, divorce, separation, large increase in interest rate and subsequently larger payment etc. Acknowledging that these issues can occur making it difficult for the borrower to get back on track the government is now facilitating help to consumers in trouble to see if the reasons why they are behind can be fixed or if they are just deadbeats, with the offered help being to no avail. To find out if the government can help you get back on track you might want to first visit the lender and try to negotiate a forebearance agreement with them that in the worst scenario will lead to a deed in lieu of foreclosure. If that fails then you might want to visit these sites to see what help they offer
Fannie Mae Loss Mitigation policies on Foreclosures
https://www.efanniemae.com/is/hcounselors/lossmitigation.jsp

Site #2
http://www.fanniemae.com/housingcommdev/resourceshomeed/lossmitigation.jhtml?p=Affordable%20Housing%20&%20Community%20Development

FHA Definition of terms used in Loss Mitigation on Foreclosures
http://www.fha.gov/sf/svc/faqmain.cfm

Government article and information on Foreclosures
http://www.occ.treas.gov/cdd/spring06b/cd/gsesusetech.htm

HUD Initiations of foreclosures, an explanation
http://www.hudclips.org/sub_nonhud/cgi/nph-brs.cgi?d=HBKS&s1=Foreclosure+procedures&op1=AND&l=100&SECT1=TXT_HITS&SECT5=HBKS&u=./hudclips.cgi&p=1&r=83&f=G

HUD: Servicing and Loss Mitigation on Foreclosures
http://www.hud.gov/offices/hsg/sfh/nsc/faqnsctc.cfm

Site #2
http://www.hud.gov/offices/hsg/sfh/nsc/nschome.cfm

HUD: Approved House Counseling Agencies includes foreclosure issues, by state
http://www.hud.gov/offices/hsg/sfh/hcc/hcs.cfm

HUD: Article on Foreclosure Issues
http://www.huduser.org/Periodicals/ushmc/fall95/fall95.html

National Home Recovery Program for foreclosures http://www.nhrp.com/

Steps that can be taken to prevent foreclosures: http://www.consumerlaw.org/initiatives/seniors_initiative/advforcl.shtml

FHA: Loan Reform programs
http://www.hud.gov/offices/hsg/fhareform/index.cfm

Dreams Foreclosed – Scams about foreclosures – A pamphlet: http://www.consumerlaw.org/news/ForeclosureReportFinal.pdf

Free Foreclosure assistance – Homeownership Preservation Foundation
http://www.995hope.org/


Free legal aid search for all states: http://www.lawhelp.org/

I wish you success, please note not everyone can pay their mortgage if the circumstances become such that there is nothing they can do on a temporary basis, but if you hunker down you can achieve getting back on track. Temporary circumstances are not permanent and any one that simply tells you to pay your bill is either retired with nothing better to do or doesnt care about the reasons why you can't pay or obviously is not professionally licensed to help others.

Answer 8

Sure! Just pay your arrearages and the foreclosure will be stopped dead in its tracks.