The United States is currently facing a tough economy and many people have lost their jobs and are facing foreclosure of their homes. The good news is that foreclosure is not everyone’s reality. Depending on your circumstances, your bank may be able to work with you to come up with an alternative to foreclosure that allows you to remain in your home. If not, there may at least be a way to prevent foreclosure from destroying your credit.
There are several possible alternatives to foreclosure that may work for you:
- Forbearance: You may be able to get your bank to agree to a delay in your mortgage payments for a certain amount of time. Once the time period has passed, you will start to pay your mortgage payments on a monthly basis, as you had paid in the past. If your bank agrees, it may be on the condition that you pay an extra lump-sum payment or extra partial payments. This may work out if you know that you will be unemployed for a finite, temporary amount of time.
- Repayment plan: The bank may give you a later deadline to pay your mortgage if you have only missed a few payments. This may not work for you if you have missed several monthly payments because the agreed-upon amount with the bank will most likely be higher than your original mortgage payments.
- Modification of your loan: The bank may allow you to modify your loan so that your interest rate is lower than what you had when you took out the loan originally. You may also be able to extend the time of the loan and/or tack on the payments that you could not make before.
- Selling your home: If you are able to sell your home, you will have the money to pay off your housing debt. There is a possibility that you may still be responsible for the taxes on the debt but you will most likely be in better shape in any case.
Solid legal advice
Consulting a Michigan lawyer who specializes in foreclosure may prove to be valuable to your situation. The lawyer may be able to advise you about measures that you can take to save your home and prevent it from going into foreclosure. The lawyer can also help you to understand your options and your rights.