When you’re slipping behind on your home loan, the most effective thing that you can do is speak to your lender as soon as possible to try and come up with some kind of payment arrangement. If you hold out until a notice of default has been filed, the mortgage lender will be less likely to work out any kind of payment plan with you. By speaking with your lender in a timely manner, there is a chance that they will give you some time to get your payments up to date and stop foreclosure.
However, if for some reason the loan provider won’t work with you, here are a few things you can do to stop foreclosure on your home.
If you owe much more on your home then what it is worth, a short sale might be an option for you. A short sale basically means convincing the mortgage company to accept less than what you owe on the house so that you can get it sold. You can bargain with the loan provider or you can hire a representative to do that for you. Unless you understand real estate, I would definitely recommend the second option.
Note: Only a few properties will be eligible for a short sale and only some banks accept a short sale to stop foreclosure.
Deed in Lieu of Foreclosure
Another thing that can be done to stop foreclosure is to get a deed in lieu of foreclosing on the home. The homeowner must prepare a deed and get it notarized. The bank will then waive the debt and stop the foreclosure instantly. Unfortunately, this process can affect your credit the same way as a foreclosure would, so try to negotiate keeping it off your credit report as a condition of the deal. In your agreement with the lender, be sure to work out the right to retain occupancy until you find another place to live.
The entire procedure is usually quite complicated. The assistance of experienced mortgage loan modification services might help make the process go more smoothly, since they carry out all of the paperwork and negotiation on your behalf to stop the foreclosure on your home.