Process to Stop Foreclosure
If you’re wondering how to stop foreclosure at the last minute, there are a few things you need to be aware of that may make it possible to save your home. What’s more, stopping foreclosure is not just about saving your home — it’s also about securing your financial future.
Here’s what you need to understand. Going through a foreclosure and being forced out of your home by the sheriff is not merely painful and embarrassing in the short term. If you have children, being torn out of their neighbourhood and friends’ circles can be just as problematic as making them adjust to a new school in a new area and a new (smaller) place to live. Yet children are adaptable and may see it all as a game — the people who won’t see it as a game are the people who wrote the mortgage and the people who keep your credit report.
When your house is foreclosed, the foreclosure goes on your credit report for the next seven years. That means for the next seven years, any time you go to borrow money — get a credit card, buy a car, take out a loan for your business — the lenders will see you as a “high risk” and will increase your interest rates substantially.
In fact, for the next two or three years after a foreclosure, you will likely find it impossible to get credit from a traditional lender at all.
To make matters worse, the consequences do not stop there. When the lender begins foreclosure proceedings against you, they almost always begin a simultaneous lawsuit against you also. Why? In the event selling off the foreclosed home does not cover the balance of the mortgage and their legal fees, the lender will use the lawsuit to keep you “on the hook” until you have paid everything off.
This means the process may not end with the foreclosure. You may still find yourself in debt even after being pushed out of your home — a court may order you to keep making payments to the lender long afterwards.
Facing a future like this, it’s no wonder many homeowners start saying, “Help me stop my foreclosure!” And, there are are a number of ways you can indeed stop a foreclosure sale date. Let’s look at your options.
How Can I Save My Home From Foreclosure?
First, realize that for all the bluster, lenders would prefer not to foreclose on your home. If you can demonstrate that missing payments was due to a one-time emergency and that you will be able to stay on track in the future, they may be willing to negotiate an alternative payment plan. But to do this, you must take action immediately and call them as soon as they notify you they are planning to foreclose… if not sooner.
Second, if you are already in the foreclosure process, you still have options. The judge will generally give you a six-month “Redemption Period” during which you can stop foreclosure by paying off the lender. While you likely do not have enough cash on hand to pay off the balance of the mortgage including legal fees, it’s often possible to refinance your mortgage.
You can refinance even if your credit score will not allow you to get a loan from a traditional lender. More on this later.
“Stop My Foreclosure — Whatever It Takes!”
Finally, if you are not financially in a position to keep living in your home, you can still avoid the fallout of a legal foreclosure by cutting a deal with the lender to allow a “short sale” or “friendly foreclosure.”
With the former, you sell the home for whatever it is worth (usually less than the mortgage) and the lender accepts the loss. With a deed-in-lieu of foreclosure or “friendly foreclosure,” you voluntarily sign over the property to the lender and move out. In exchange for avoiding the expense and time of a foreclosure process, the lender agrees not to keep you “on the hook” for outstanding costs — you can move forward with your life free and clear.
How To Save Your Home, Now!
But if you have a steady source of income and can afford to keep your home, there’s no reason to let your current bad situation from forcing you out of it. Even if you are coming into the process with sub-par credit, HOS Financial’s Refinance Buy Back program will connect you with private lenders who will take over your mortgage no matter how bad your credit may be.
The primary criteria for eligibility are that you have at least 10% equity in your home and regular income. If you meet these criteria, HOS Financial will arrange to stop your foreclosure in its tracks and coach you back to excellent “credit health” so you can revert back to a traditional mortgage in around 2-3 years. During this time, a portion of your rent will even go towards your future down payment.
If this sounds right for you, contact HOS Financial today. There’s not a moment to lose! Every foreclosure process has very hard deadlines — if you delay, you might needlessly lose your home.
