When facing the treat of foreclosure, nothing becomes more important than trying to save a family home. For that reason, homeowners who have the threat of foreclosure hanging over them should be familiar with the possible alternatives to foreclosure. Options that may be available to struggling homeowners as an alternative to foreclosure can potentially include the following.
A special forbearance may be able to be arranged with the lender that establishes a repayment plan based on the homeowner’s financial situation. The struggling homeowner may receive a temporary reduction or suspension of payments. If the homeowner has experienced a reduction in income or an increase in living expenses, they may qualify for a forbearance.
A mortgage modification may allow the homeowner refinance the debt or extend the term of their mortgage loan. This may allow them to reduce monthly payments and get caught up. If the homeowner is recovering from financial challenges that will allow them to afford the new payment, they may qualify.
A partial claim may allow the homeowner to work with eh lender to obtain a one-time payment from the FHA insurance fund to bring the mortgage current. If the homeowner is able to begin making full mortgage payments, they may qualify.
Personal bankruptcy protection, such as Chapter 13 bankruptcy, may allow the homeowner to reorganize their debt into a repayment plan that allows them to get caught up on mortgage payments. If the homeowner is able to make payments according to the repayment plan, they may qualify. There are other requirements to potentially qualify homeowners should be familiar with and they should also have a reliable source of income.
Other foreclosure alternatives may also be available, including pre-foreclosure sales or a deed-in-lieu of foreclosure. Struggling homeowners searching for an alternative to foreclosure should be familiar with all of these options, how they might help and how to qualify for them.