3 Ways to Avoid Foreclosure

January 17, 2019

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It happens…. Something happens in your life and you get just a little bit behind and one day you receive the legal paperwork and realize, “my home may be foreclosed.” This can be downright terrifying. What will you do? Will you lose your home? Are there other options to save your home or at least save this from forever tarnishing your credit?

Believe it or not, you have options! For homeowners in the Topeka, Kansas area; pre-foreclosure is not foreclosure. You haven’t lost your home yet, so let’s take a look at what your options really are.

Work with your lender on a Loan Modification Program

The first thing you should do when faced with the threat of foreclosure is to contact your mortgage lender and try to work out an agreement or adjustment to your payment. It costs your lender a great deal of time and money in legal fees to actually foreclose on a home. It’s a step and expense they’d prefer not to take.

If you’re behind on your payments and truly want to save your home and want to get caught up, give your lender a call and see how they may be able to help you and help themselves with a loan modification. They may be able to work out a reasonable payment plan for you to get back on track.

Consider Filing for Bankruptcy

Filing for Chapter 13 bankruptcy could be another possible option for handling the threat of foreclosure. If successful, this type of bankruptcy could allow you to establish a payment plan to catch up on your overdue mortgage payments while possibly lowering the amount you owe in the process. This won’t help your credit score, but it won’t be as damaging as having a foreclosure on your permanent record. If this may be an option for you, give a local bankruptcy lawyer a call to discuss your financial situation and determine if this would be a good option for you.

Hire an Experienced REALTOR® and sell your home

Selling your home is also an option. Find a real estate professional well versed in negotiating with your lender to give you time to sell and possibly accepting less than you owe on your loan. This is called a Short Sale. Lenders will commonly accept less than what is owed to avoid the much more costly expense of proceeding with a foreclosure, but it takes an experienced and savvy agent to make this happen.

Paying off the loan with the sale of your home will save you from the damaging hits to your credit that a foreclosure and a bankruptcy will cause.

To be honest, it’s not a simple process. You will have to “prove” to the bank, with the proper forms and documentation that your current financial situation does not allow you to catch your payments up or payoff the loan without a sale. Your REALTOR® can help walk you through the process and guide you along the way.

Even if the home has been foreclosed on and you have notice that the Sheriff sale date is in the works, we can still help. You may still have more than 90 days to get your home sold and the lender paid off to avoid foreclosure!

Give John (785) 806-2711 a call for a confidential conversation and let us help navigate you through your best options to save you from this headache!

 

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