Can You Stop Foreclosure?

You have several options when it comes to saving your home from foreclosure. Refinancing, bankruptcy, selling your home, working with your lenders Loss Mitigation Department; all of these can stop your foreclosure.

When trying to keep your home, loss mitigation is the best option to keep your home and minimize damage to your credit.


Loss Mitigation

If your loan balance is relatively high versus the value of your home, your refinance options are very limited. It would be very difficult to try and refinance your home loan because of credit score and loan to value issues.

However, you may have a case for Loss Mitigation.

What that means is that you have the right to contact your lender, and see if there is a way for you to get caught up with your home loan. If you present your case effectively, you would probably be able to qualify for a home loan workout plan.

There is another thing to consider when thinking about Loss Mitigation to keep your home.

You have to be able to make the new payments.

If you agree to a lender's "workout" or "loan modification" solution and then fail to make the agreed-upon payments, you'll be right back into foreclosure.

This can be a big problem if the financial crisis that caused you to fall behind in the first place isn't over.

If you don't know where you're going to get the money to make the payments, trying to work out a solution with your lender will be tough.

Be realistic. Many times people struggle to hang on to a house that they simply can't afford. That may seem harsh, but sometimes it is the truth. This is especially if you have an Adjustable Rate Mortgage where your monthly payment continues to increase.

If that is the case, you may not be able to work out a plan with your lenders loss mitigation department. You may want to think about a Short Sale or some other option of selling your home so that you can at least minimize the damage to your credit, put this behind you, and get on with your life.

By: Robert Spencer

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