For those that have already been served the notice of foreclosure, it can become a difficult situation. However the foreclosure can still be stopped if the homeowner starts a communication process with the lender. This can help them in stopping the foreclosure. The lenders are also willing to give a number of options to the homeowners who will allow them to pay back the mortgage loan and also help the homeowner in keeping their home. This is especially good, since the financial and other implications of the foreclosure process can be extremely bad for the homeowner.
First and foremost the homeowner should start a dialogue with the lender and tell them about the financial hardship that they are facing. A letter of hardship should be drafted as soon as possible and should give the complete details of the financial problems that the homeowner is facing. Along with this, the homeowner should also attach the necessary documents to prove that they are actually facing the problem.
Maintain all copies of correspondence and ensure that all communication has been done in writing to prove your point. There are a number of alternatives that can be provided by the lender. First and foremost, they can offer a forbearance of the loan
Forbearance
This is a situation in which the homeowner needs to make a low payment or no payment during a time frame. The time frame can last 6 months or even more. This can help the homeowner tide over the current financial problems. At times this option is also used by the homeowners to tide over their temporary financial problem and come up to speed with mortgage loan.
The financial problems that can be faced by the homeowner include loss of jobs, long term illness, divorce or even death. It’s best to employ the services of the attorney to help the homeowner in tiding over this problem.
Always communicate with the lender using the return receipt mail. Using this method the homeowner is assured that the lender has actually received the intimation of the financial hardship.
Usually the lender will respond back to the letter within a week to up to a month. In case the bank rules in favor of the forbearance process then, the homeowner can be certain that they can save their home. In other case, where the lender doesn’t rule in favor of forbearance, other alternatives are still applicable.
Short sale
The homeowner can also ask the lender to perform a short sale. In most cases, the lender will agree to a short sale where the home is sold for a lower value than the outstanding amount on the loan. The lender must agree to this sale or else, the homeowner could also ask for a “Deed in lieu “of foreclosure. In case of short sale, the house is sold to another buyer and the agreements stands between the buyer and the lender. The proceeds from the sale are used for paying the part amount on the outstanding mortgage loan.
Julie Thompson, has been working on ForeclosureDataOnline.com studying the foreclosures market, try to visit ForeclosureDataOnline.com and find all related information about foreclosed homes.
