4 Things You Should Do If You Are Facing Foreclosure

Foreclosure occurs when a lender repossesses your home because of unpaid mortgage. Going into foreclosure is scary. However, receiving a notice of delinquency does not mean that you automatically lose your home. Most lending institutions offer a 15-day grace period that may or may not have a late fee attached. If you fail to pay for your mortgage for 90 days, the foreclosure process will begin. Nevertheless, there are steps you can take to slow down the foreclosure process and get back on track. Keep reading to learn about four things you should do if you are facing foreclosure.

  1. Educate Yourself

The first thing to do is to educate yourself on what is happening. Read over everything you have received from the lender, including your mortgage. Most initial notices come with information on ways to prevent foreclosure. The second mail will contain essential warnings about the foreclosure and pending legal actions. No matter the report, it is advisable to stay informed. Educate yourself on how your state handles foreclosure. In some states, the lender must file a lawsuit against you before proceeding with the process. In others, trials are not a requirement. This information will help you figure out the amount of time you have to find a solution.

  1. Contact a HUD-approved Housing Counselor

If you need help figuring out your next move, you can opt to speak with a HUD-approved housing counselor. These federally funded agencies work with lenders to secure affordable repayment options for struggling homeowners. The counselor will look at the specifics of your situation and help you figure out your options. Make sure you work with a free counselor since some may be frauds looking to take advantage of those in tough situations.

  1. Make a Short Sale

If you do not see yourself being able to repay your dues even with a repayment plan, consider making a short sale. Some companies such as sell house fast Oklahoma will help you with your short sale. You have to ask your lender for permission since they have to agree to settle for less than the home is worth. The bank is also in charge of choosing which offer to accept. In this case, you will ultimately lose your home, but without a foreclosure or its repercussions on your record.

  1. File for Bankruptcy

If you are thinking of this option, it is important to note that filing for bankruptcy will affect your credit extremely negatively. However, it can be your only solution toward delaying foreclosure while reducing or eliminating your debt. The moment you file for bankruptcy, an “automatic stay” is imposed on your assets. This imposition inhibits collections and temporarily halts the foreclosure process.  There are two types of bankruptcy: Chapter 7 and Chapter 13. The kind you file for depends on how much income you have. Chapter 7 will wipe out your debt by allowing a court-appointed trustee to sell off any of your non-exempt property to pay back creditors. Chapter 13 will enable you to keep your property. However, you have to create a repayment plan to clear your debt. Either one will give you time to figure out the way forward.

Now you have the best alternatives if you find yourself in this challenging situation.