I have missed three payments of my house mortgage what can I do to prevent it from going to foreclosure?
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Why do you ask such a question, are you brain dead ? Make the payments. No bank really wants to foreclose and many are dragging their feet on tossing deadbeats out into the street. Your in luck there and maybe by calling the bank and working out a plan they will not have to put your file into their non performing pile. Offer to make at least 1/2 of the arrearage up immediately and they will know you are serious.
The magic number is 3 missed payments and your there now, they might hardline you some but keep in mind they want to get paid without foreclosing. Right now banks are bending over backwards to work out issues with bad loans. DO NOT FILE BANKRUPTCY or you will lose the home and in most cases even sooner than through a typical foreclosure process. The rules to prevent foreclosure were in your loan docs you signed.
Pay the mortgage!
Is it possible to refinance?
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unless the bank really wants your house...talk to them and work out something...
Pay what you owe and there will be no foreclosure!
My friend had the same problem - she finally ended up tallking to the financial institution and worked with them. It's been really difficult for her but so far she's doing great.
You can make the payments...
If not, the bank will foreclose on you. I suggest calling the bank and speak to the loan servicing / foreclosure department. Ask for a "forbearance agreement". They might allow you to make additional payments each month to catch up. If you don't have any money and don't plan on having any then you are delaying the inevitable. 90 days is a severe deliquency. Most lenders start filing foreclosure notices after 120 days. Call first thing Monday. The bank doesn't want your house back, believe me...
You can also sell your home. Sometimes the bank will let you sell it for less than you owe known as a "short sale". Now is the time to negotiate such an agreement. Then contact some realtors in your area and see if you can "fire sale" your home before the sheriff comes knocking.
If you can not bring the account up to date immediately, call an attorney to stop any further actions.
If you've already 90 days late with payments, the chances of refinancing now days is virtually nil. If you don't think you'll catch up on your payments quickly, contact your lender's "Loss Mitigation" or "Owner Retention" department and explain your situation. Let them know that a loan modification won't work and ask them if they will consider a "short sale." Most lenders will allow you to live in the house without paying as long as you're actively trying to get it sold and you maintain it (mow grass, general maintenance, etc.). Most lenders I've worked with will allow about 90-120 days if you are working with them to get it sold so they don't have to foreclose. I'd work on this ASAP.
#1 Rule in Preventing Foreclosures:
MAKE THE PAYMENTS ON TIME EVERY MONTH!
You can also try the Home Owners Preservation Foundation. They are a nonprofit organization that will help you negotiate a forebearance with you lender for free. They are at www.995hope.org.
Also, contact your local HUD office. There are a lot of local programs available.
Two other options you have: Deed in lieu, and reverse mortgages. Deed in lieu is where you basically surrender your deed to the mortgage company without them having to go through the legal battle. It saves them tons of legal costs, and it saves you from having a foreclosure. A reverse mortgage is where you sell you home back to the lender based on how much equity you have in the home. If you have been paying the mortgage on time for a long time, you will have a couple of months or years of time with no mortgage payments to get your finances in repair before the lender owns your home and you have to vacate the premises.
Finally check with local investors. There are always people out there who will buy your house from you for a profit. You can find them in your local newspaper under the real estate classifieds. They normally have ads that say "we buy houses". This may not always be profitable to you. It will remove the problem though, and save you from having a black foreclosure mark on your record for life. A lot of times you can walk away with some cash in your pocket too.
Whatever you do - you have to MOVE FAST and act now. A bank can foreclose in a very short amount of time. Once a house is foreclosed, then you have lost every claim to any money that you have put into that property (although in some states there is a redemption period in which you can still pay off the loan and get the property back).
Make up the 3 payments.
The rules to prevent foreclosure will be determined by three factors: what kind of mortgage you have, what state you live in, and what your present financial situation looks like. Start by looking up your state's foreclosure laws, and then consult this list of various ways to stop foreclosure. Depending on the type of mortgage and your finances, some may not apply, but there are enough options that you should be able to find a few ways to save your home.
The list of various methods to stop foreclosure that is presented below is a nearly comprehensive accounting of the most common ways homeowners can use to save their homes, either by staying in them and avoiding foreclosure, or by getting out of a bad situation with as much of their financial lives intact as possible. There are really no magical ways to end the foreclosure process -- but there are enough tools that homeowners have available, that they can choose from a number of options to help them out of their hardship situations.
1. Save up and get current on the mortgage by paying back the payments you've missed, plus the interest, late fees, attorney fees, etc. Understand that there are often thousands of dollars of extra charges that are added once you start missing payments and especially if the lender hires a law firm to pursue the foreclosure.
2. Work with the lender to put together a repayment plan, which would require you to put down part of the amount you are behind now and pay back the rest over a period of months, along with you current monthly payment. Usually, repayment plans can be worked out through your lender's loss mitigation department, and will result in you paying almost twice as much per month as your regular mortgage payment. This is to help you get caught up on the payments you missed while you are paying your original monthly obligation.
3. Work with the lender to modify the terms of the loan to say that the missed payments are spread out over the life of the loan or put on the back end of the loan. This is called a mortgage modification or loan modification. Some lenders will not do this because they do not hold the paper to be able to modify it. This is especially true for mortgage servicing companies, who only service their loans and collect payments, but who do not own the loans.
4. Refinance -- find a hard money lender or traditional lender that will consider foreclosure refinance loans. Qualifications include lots of equity and lots of income, since your interest rate will probably be over 10%. Foreclosure refinance loans can be difficult to qualify for and may result in higher monthly payments, but they are a good way for homeowners to get a fresh start with a new note and new lender.
5. If you have an FHA loan, you can get a one-time loan from the FHA that will bring you current and is placed as a lien on the property that you would have to pay back if you sell or refinance the home. This is called a partial claim. You would have to contact the FHA directly for this one time payout to get you caught back up on your mortgage.
6. Sell to a private investor or friend/family member and lease/rent the property back from them. That clears off the foreclosure loan on the property and uses someone else's good credit to get a new loan and allows you to stay in the property. Investors can also work out short sales on properties, allow they usually do this in the hope of flipping the property by reselling it quickly at a profit.
7. Bankruptcy will stop the foreclosure process, but is usually an expensive alternative to setting up a repayment plan, mentioned above. Attorney fees, trustee fees, court costs, and high monthly payments cause a lot of people to fail their bankruptcies. Only consider bankruptcy if you desperately want to prevent foreclosure and if you have a significant amount of income you can dedicate towards the bankruptcy payments.
8. Short sales are a good option if you owe more on the property than it is currently worth. A short sale means the bank accepts less than what they are actually owed, and would allow you to get out of the loan, at least. The bank would not be able to come after you for the rest of the loan amount, since, by accepting a lower amount, they forgive the rest of the debt owed on the mortgage.
9. Sell outright if the property is worth enough and you have a willing and able buyer. List the house yourself of through a local real estate broker. In some cases, it is the right decision just to unload the house to stop foreclosure and focus on repairing your credit until you can purchase a new, more affordable home in a few years.
10. If 1-9 do not work, you can offer the bank a deed in lieu of foreclosure, which means you're voluntarily giving the property back to the bank and they are agreeing that the property is payment in full of the loan. This is not much better than a foreclosure, and you have to leave the property anyway, but it will prevent the sheriff sale and eviction process. The bank will not be able to ask for any extra money or sue you for a deficiency judgment, because they accept the property itself as satisfaction of the loan.
11. If 1-10 do not work, you can just move out and walk away and forget about the property. This is definitely not recommended if you care about your credit and plan to borrow money for several years, but foreclosure should teach you not to rely on banks to help you out when you face a hardship. All they really do is promise great deals when you think of going with them, and then throw you to the foreclosure dogs if you miss a payment. Many homeowners simply walk away because the foreclosure situation is so intimidating, but, as listed above, there are numerous options that are better than just giving up on the property.
Those are the most common options that can be used to stop foreclosure. There are a few others (suing your bank, etc.), but they involve much more cost and legal involvement and may not end up stopping the foreclosure process in the end.
Good luck.
ForeclosureFish
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