Many Michigan property owners want to avoid foreclosure if at all possible. If you miss out on a payment, a lender can claim you are in default on your loan, which is often the first step toward foreclosing on your property. This does not mean foreclosure is inevitable, not if you understand the options available to keep a foreclosure from happening.
Property owners should not assume that their lender is going to race to foreclosure because of a missed payment, although that could very well happen. Chron.com explains that borrowers can still approach their lender to ask about modifying their loan. Some lenders do have options available to ease the burden of paying off a mortgage. They may let you go through a forbearance program that puts off payments for a later date so you can pay off your outstanding amounts.
Other options may include the following:
- The lender may reduce your interest rate
- The lender may extend the term of your loan
- Your arrears can be paid at the end of the loan
Michigan entrepreneurs and property owners can also look for additional financing to pay off outstanding arrears. If you are paying off a mortgage on a business property, selling off company equipment or assets is one option, as is applying for a collateral or equity loan. Some business owners bring in a partner who contributes additional financing. This partnership may only last for a limited amount of time, enough to help a business pay off its mortgage.
Generally, the more financing you have available, the more options you possess in preventing a foreclosure. Some property owners who are in financial straits attempt more drastic options such as bankruptcy, which could help a person get rid of burdensome debt and make up missed payments, but could also result in liquidation, with the property going to the lender. Some people instead choose to surrender the property to the lender in a deed-in-lieu of foreclosure to avoid bankruptcy.
Staving off foreclosure is a process that should be conducted as soon as possible. If not, the foreclosure process will progress, making it harder to hold on to a piece of property. People may find themselves nearing foreclosure for many different reasons, so do not interpret this information as a substitute for the advice a qualified foreclosure attorney can provide.