What is foreclosure & how to prevent it

Many homeowners aren't even aware that it's possible to prevent foreclosure and keep their homes. You can even stop the proceedings an hour before the auction starts! If you are a homeowner facing foreclosure, you should know about all the options you have available. These tips will tell you how to prevent foreclosure and remain in your home.

• You can get the loan reinstated. In the ideal situation, you will be able to pay the back payments and bring your loan to a current status. You'll have to pay any late payments, plus late fees and attorney's fees. This is the fastest and most efficient way to stop foreclosure.
• Get a forbearance. When a lender decides to foreclose, it's very expensive for them. They would probably rather work an arrangement with you than to go through foreclosure proceedings. Talk to the lender to see if they would be willing to work out a repayment plan, which can vary according to situation and lender. They may be able to reduce or temporarily suspend payments, and if you have a government backed loan, you may have even more choices.
• Opt for bankruptcy. Some attorneys will advise you to do this, and it is a legal way to avoid foreclosure, but the process might still go on and you will still have bad credit for seven years. Before deciding to file for bankruptcy, you should consult with your lawyer.
• Sell the home. The only problem here is if you list it with a real estate agent, and it does not sell, the lender sees it as irrelevant and you are still in foreclosure. The best way to do this is to find an agent that's familiar with foreclosures. They will be able to find investors that will buy your home, and preventing foreclosure can be as easy as finding one of these investors yourself.
• Get a deed in lieu of foreclosure. This is where you sign the house over to the lender, but they are not obligated to accept it. Talk to the lender on how they will report it to the credit agencies. If the lender does not accept the deed, they have to file a Notice of Non-Acceptance with the county.
• Do nothing at all. We'll only mention this because many homeowners take this route, but this is the least advisable thing to do. You do have choices when you're in foreclosure; you just have to talk to someone knowledgeable and find out what they are.