1. Short Sale
If your “upside down” so to speak and you owe more on your home than it’s current market value, you can negotiate with your lender so thay you may sell the home for less than you owe, with their permission. Once sold this satisfys your debt. The lender takes the loss. This a common solution.
2. Government Home Owner Assistance Programs
There are a number of government-backed program’s that have been created as foreclosure avoidance options with an alphabet of acromyms like HAFA, HAMP, and HARP.
A reinstatement is often the simplest of solutions, but quite often the most difficult to achieve. The homeowner just pays the total past due amount (including late fees) to the lender. Now where are they going to get the money for that?
4. Mortgage Modification
A mortgage modification is just that, changing, the interest rate on the loan, the principal balance of the loan, the term of the loan, or some combination of these.
A deed-in-lieu is where the homeowner simply gives the property to the lender instead of going through the foreclosure process.
A forbearance is a type of repayment plan where the homeowner negotiates with thelender to allow them to repay bmissed payments over an agreed upon period of time.
7. Rent the Property
This is a possibility if the rent for the house is enough money to cover the monthly mortgage payment.
8. Servicemembers Civil Relief Act
The Servicemembers Civil Relief Act allows membesr of the military who are experiencing financial dificulties due to deployment, whose debt was entered into prior to their deploymentto qualify for relief.
Bankruptcy can be a “foreclosure solution,” in some states but it can be a risky proposition. Make sure to get the advice of a well qualified bankruptcy attorney when exploring bankruruptcy as an option.
Refinancing means you will geta new loan based on your current credit standing, hopefully at a lower rate, bring down your payments. The problem is you may have already missed one or more mortgage payments, which will affect your credit score and your ability to refinance.
You can develop a realistic strategy to plan for your future that is both financially stable and full of hope if one of these options works for you.