Categories: Real Estate Laws

Alternatives to Foreclosure

Execution is the legal action that the lender will use to repossess (take possession) of your home. Below you will find some alternatives to foreclosure. Talk with your mortgage lender to see if you qualify for any of the following options:

Special forbearance. Your lender can prepare a payment plan based on your financial situation and perhaps temporarily provide you with a reduction or suspension of your payments. You may be able to be eligible if you have recently got a salary reduction or an increase in their responsibilities and living expenses. You must provide information to your lender to demonstrate that you are eligible for a new payment plan.

Modification of Mortgage. You may be able to modify your debt or extend the term of your mortgage loan. This may help you catch up by reducing the monthly payments to a more affordable level. You may qualify if you have recovered from a financial problem and can afford the new payment amount.

Claim Partial. Your lender may be able to work together with you to obtain a payment from the insurance fund of FHA-(Housing Management) and to put its debt on a current basis. You may be eligible, if you can begin to make full payments of your mortgage debt.

Pre-Foreclosure Sale. Sell the property at a price less than the amount necessary to pay the mortgage debt you can avoid a foreclosure.

Deed-in-lieu of foreclosure. As a last resort, you may voluntarily be able to “return” your property to your lender. This action does not harm your credit like a foreclosure. If you do not qualify for any other alternative and their attempts at selling the house before foreclosure were not successful, you may be eligible for a deed in lieu foreclosure.

How do I know if I am eligible for these alternatives?

Your lending institution will determine if you qualify for these alternatives. A specialized agency can help you determine which of these options, if any exist, can help to meet their needs and to negotiate with your lending institution.

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