4 Sure Ways To Stop Foreclosure

Believe it or not, banks and lending institutions are willing to go the last mile with homeowners who sincerely want to save their homesteads

.

You don't think so? Look at it this way-

Until it becomes the last option, banks are not keen on repossessing a borrower's home and have to go through the process of making properties marketable enough to sell at a profit and recover loan balances. Lenders often need as much as $40,000 in processing fees and costs to market and liquidate a repossessed unit. Another reason is a not too good economy could cause foreclosed property to stay on the market for years and this in turn negatively affects the principal and interest payments. Additionally, foreclosed homes cause area property values to go down, as vacant lots are left unkempt, rodents multiply and vandalism increases.

Let's examine four different ways to stop mortgage foreclosure:

1. Loan Workout: Homeowners may be able to propose a loan workout to stop mortgage foreclosure, save equity and preserve creditworthiness. The terms of a workout depend largely on how far the bank is willing to go to help homeowners.

2. Mortgage Refinancing : To stop mortgage foreclosure, refinancing with a second loan buys homeowners more time. A secondary loan financed at a lower interest rate makes the first note disappear; but owners will have to qualify for the new mortgage either with another lender or the current one.

3. Sell: Another strategy for desperate owners in default is to attempt to sell the property to a buyer with excellent credit and plenty of cash. Distressed sellers facing foreclosure may be willing to accept a cash down payment to get properties out of arrears and off of the chopping block. The advantage to the seller is obvious: consumer credit reports remain unmarred by foreclosure.

4. File Chapters 7 or 13 bankruptcy petitions: As a last resort to stop mortgage foreclosure, owners can file a Chapter 7 or a Chapter 13 consumer debt protection petition. A Chapter 7 liquidation bankruptcy allows owners a chance to pay creditors through a court-ordered sale, or liquidation of assets. Distressed homeowners who file Chapter 13 petitions consent to a three- to five-year repayment plan which restructures debt and makes monthly instalments to creditors. The advantage of both filings is that homeowners get to remain in the home under the terms of the case. A distinct disadvantage to filing bankruptcy is that the owner's credit report will remain tarnished for at least seven to a maximum of ten years.

Owners should seek counsel from financial management professionals before deciding on either of these options.

4 Sure Ways To Stop Foreclosure

By: Melisa Kay

POST COMMENT

A Buyers Guide On Fnma Foreclosures Job Opportunities To Deceit Foreclosure What Are Foreclosure Listings Good For? Faulty Foreclosures Palmdale Attorneys Aid in Foreclosures Bear Valley Denver Foreclosures - Fix and Flip Steps Rules Governing Foreclosures in Baltimore Short Sale Versus Foreclosure: Which Option Is Better For Me? Negative and Positive Issues about Foreclosures Compulsory Mediation Bill Of Maryland May Not Solve Foreclosure Problem California's Foreclosure Process The Nature Of Florida Foreclosures And Their Affect On The Economy Get In On The Georgia Foreclosures.