Foreclosure can be devastating to your credit. The below list can give you ideas as to how to handle the situation short of an auction of your property at the courthouse steps by foreclosure sale.
#1. Renegotiate with the lender by contacting the bank at the first sign of trouble. This may or may not work. Many banks have a loan modification process that only ends up significantly increasing costs to the buyer over the long term. You may actually end up paying for the house three times or more.
#2. Reinstate the loan by making up all overdue payments. This is great if you can afford it, but then again this may be unlikely or you wouldn't be in this position in the first place. Borrowers do have the right to reinstate the loan up until the foreclosure sale. This can be very costly as the bank may legally request payment of bank fees, trustee fees, and other fees in addition to the missed payments.
#3. Forebearance. This option allows you to stop paying for a period of time while you are suffering a temporary loss of a job or other circumstance that leads to an temporary inability to make your payments. This option can add tens of thousands to your loan balance and may end up contributing rather than leaving your problems.
#4. Redemption. In some cases you may be able to redeem the loan after a judicial foreclosure. If you have friends or family that can help with your situation, this may be an option.
#5. Sell. If done in a prompt manner, this may be the best option for those wishing to have the least affect on their credit. If you would like to sell your home in 14 days or less click here.
#6. Bankruptcy. This again is most likely only a temporary fix. This will end up in possibly significant legal expenses and destroy your credit, but this will give you more time to get your finances in order and possibly put you in a position to continue paying the loan.
#7. Deed in Lieu of Foreclosure. This method is similar to the option of selling your home but is giving the property back to the bank prior to the foreclosure.
Please feel free to call us 760-456-9357 to discuss the above options in detail.