Strategies for Helping in Handling Foreclosure

Here are some strategies to help deal with foreclosure:

--Contact your lender early, often and in person. It’s much easier to foreclose on a faceless borrower. Seek out a person of authority, such as the head of the loan service department.

--Contact a credit counselor to create a budget or a consolidated repayment plan for debts other than your mortgage.

--Pare down expenses. Consider doing without luxury items. Sell your assets or take on a second job. Move out and boost your income by renting out your home. Pay your house payment first and all other debts second.

--Demonstrate to lenders your willingness to pay. Submit potential strategies for loan work outs.

--Forbearance will either lower or eliminate mortgage payment for from one to six months. Genuine hardship is a determining factor.

--Refinance for better terms. You may have to guarantee future employment.

--Borrowers of FHA-insured and VA-guaranteed loans have government agencies that will go to bat for them. Loan terms may be extended. Again, hardship is a determining factor.

--Assignment transfers your entire FHA-insured loan amount to HUD, which is more lenient. You must meet five criteria to be considered and you’re not allowed to own other FHA-insured loans.

--Assumptions, possible for FHA-insured and VA-guaranteed loans, transfers your monthly payments to a buyer, who may or may not assume liability for loan repayment.

--Deed in lieu of foreclosure confers the property deed to the lender, relieving you of all mortgage responsibility. Most likely with FHA-insured loans.

--Short-term payoffs occur when lenders and insurers split the loss on a loan’s unpaid balance after a house is sold.

--Military indulgence. If you’re in the military, missed payments may be forgiven while you serve, providing your loan was assumed before you signed up.

--Filing bankruptcy grants an automatic stay against foreclosure. You’ll still have to pay your mortgage, but at a later date.

--A temporary restraining order or injunction will stop a foreclosure if you have legal grounds for filing.

--Civil codes allow borrowers one 24-hour postponement of a foreclosure auction.