Home or business owners who are unable to keep up with mortgage payments face having their property put into foreclosure. It can be heartbreaking and stressful to face the possibility of losing a home, but the situation is not hopeless.
For those who want to keep their property, there are options available.
Initial steps to take
According to Forbes, the foreclosure process does not begin until the owner is 90 days late on the mortgage payment. Once it starts, the process can take a while, so there is time to do something about it.
Although it may be tempting to avoid opening mail from the lender once the mortgage is late, it is important to do so. The letters provide information about how to proceed, and the earlier the better. The first step to take is to call the lender. Many companies are willing to work with owners to avoid foreclosure. Depending on the situation, the lender may offer a number of solutions.
According to FindLaw, the mortgage company will ask a series of questions to see if the owner meets required qualifications for any of the foreclosure alternatives. One potential option is to modify the loan terms. This option is a good choice for those who experienced a temporary financial issue, such as a job loss, and is now able to pay a new amount with no issue. The lender may refinance the debt or extend the terms.
One option is the lender may reduce or suspend payments for a specified period of time. Another option to keep the house is to apply for payment from the FHA-Insurance fund, which is a one-time amount to bring the mortgage current.
Other options result in the loss of the property, but they have less of an impact on credit rating. One is to sell the house or building at a lower price. The other option is to give the lender the deed to the property.