Stopping Foreclosure: A Guide to Your Options

Stopping foreclosure on your home requires action on your part. That may seem like a given, but the truth is that many people, when faced with the possibility of foreclosure, try to ignore it and just hope that things will work out. The most unfortunate part of ignoring a bad situation is that the time you waste in pretending that nothing is wrong could be time that you put into stopping foreclosure and moving on.

If you're running behind in your mortgage payments, there are a number of options available to you to help you in stopping foreclosure. Depending on your situation and your desires, you may even be able to keep your home.

1. Stopping foreclosure by reinstating the loan with your current lender is your best and earliest option. Few lenders want to foreclose on your home - it's expensive and time consuming for them. They would far rather negotiate with you to get their money. Contact your lender EARLY, and make arrangements to make up the missed payments and bring the loan current. This option is for you if you missed payments due to an unexpected emergency expense or illness, but you can resume making regular payments and catch up on missed payments.

2. Another way of stopping foreclosure is through forbearance - a legal term for working out a way to get you up to date on your mortgage. Unlike a simple reinstatement, the lender may agree to temporarily suspend payments based on a plan to make them up later, or a temporary reduction in your payments during an illness or other emergency situation. If your loan is an FHA VA loan, you may have other options available as well.

3. Taking out a second mortgage to bring payments current on your primary mortgage is yet another way of stopping foreclosure. If you do choose this route, be aware that you'll very likely be paying a high interest rate - but it could save your house, especially if the situation that led to the foreclosure proceedings was temporary.

4. Declaring bankruptcy is a way of stopping foreclosure on your house that may allow you to remain in the house and reduce your debts. It will, however, affect your credit rating for at least seven years, so think carefully before deciding that bankruptcy is your only way out.

5. Selling your house can raise the money you need for stopping the foreclosure. While it won't keep your house, it will be kinder to your credit record than a foreclosure would be. If you decide to sell your house, contact a specialist in foreclosure sales, who can get your house sold quickly.

6. A deed in lieu of foreclosure is an option that allows you to surrender the deed to your house to the lender rather than go through foreclosure. Essentially, you give the house back to the lender voluntarily. Depending on how it is reported to the credit agency, deed in lieu of foreclosure will have less of an impact on your credit rating than losing your house to foreclosure.

Stopping foreclosure on your house is possible, as long as you are willing to work with lenders to find an acceptable solution. Consider all your options, and choose the one that is best for you in your current situation.


  Brian Shelton makes it easy to sell your house fast. For details and to claim your free reports entitled "How To Sell Your House for Cash In 7 Days or Less" and "How To Stop Foreclosure", visit the Sell House Fast website