How To Stop A Foreclosure When Loan Modification Is Not An Option

When you find yourself needing to stop foreclosure proceedings on your home

, it can be a particularly scary time in your life. Many people in this situation try to use loan modification as a way to stay in their homes. If loan modification is no longer an option, you'll need to explore some alternatives to avoid foreclosure. Here are a few options that you may want to consider when loan modification is no longer an option.

Short Sale to Stop Foreclosure

One option that you may want to consider in this situation is setting up a short sale. With a short sale, you try to sell the house for less than what you actually owe the bank on your loan. When you find a buyer who makes an offer on the property, you have to take the opportunity, and see if they'll accept it. If the bank accepts the offer, they write off the difference between the offer and how much you owe on the mortgage. Then they allow the buyer to purchase the house and you move out. While you won't get to stain your house with this option, it will at least prevent you from having a foreclosure on your home.

Refinance

In some cases, you may be able to refinance your existing mortgage with another lender. If your current lender is unwilling to work with you on a modification, you can simply pay off the loan by taking out a new loan from another lender. In this situation, it may be difficult to find a lender who is willing to give you the money since you are on the verge of foreclosure. However, you may be able to find a lender that works with high risk borrowers, such as a hard money lender. With this type of lender, they typically do not care what your credit score is or what the situation is, as long as you have a property with sufficient value.

One option that you may want to consider is participating in the Home Affordable Refinance Program. This is a government program that makes it possible for people who are upside down on their mortgages to refinance. The government gives the lender a financial incentive to allow you to refinance the loan. This is only an option for mortgages that are owned by Fannie Mae or Freddie Mac, so not everyone can participate.

Considerations

If you are confused about which options to pursue and which ones to avoid, you should contact an attorney with a vast amount of experience in this area. An attorney will be able to look at your situation, talk to the lender, and help you make the best decision based on the facts. If you want to try negotiating with the lender again, it also helps to have an attorney on your side so that a professional can handle your negotiations. Ultimately, a good attorney will try to help you stay in your house or at least avoid getting a foreclosure on your credit report.

by: Alvin Clark

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