How to delay the process of foreclosure

How to delay the process of foreclosure

Are you about to lose your home? Foreclosure can be scary for anyone. Getting the notice should not make you despair and give up that easily. You can do certain things that can slow down the process as you try to get back on your feet. Foreclosure occurs when you breach the contract of paying back your mortgage in full. A lender can repossess your home and look for ways to recoup the investment if you are unable to settle your loan.

The bank may take some time before repossessing your home. They give you a two week grace period for you to make repayments. Foreclosure proceedings only begin after 90 days if you still don’t make it pay for the mortgage. The process of repossessing a home is long since it can take up to a year. You should take advantage of this duration to make the necessary changes so that you can save your home from being repossessed. Use the following techniques to prolong the process.

Be informed

You need to learn more about the process of foreclosure. Instead of panicking, take your time to read through the documents you get from the lender. Most notices regarding late payments contain details on how you can prevent foreclosure. You may also receive mail that informs you of the pending legal action as well as the foreclosure process.

Know how the process is handled in your particular state. In some states, the lender must sue you in court before beginning foreclosure proceedings. This only happens in judicial foreclosure states. Understanding the laws of your state can help you estimate how much time you have to get a solution.

Talk to the lender

Get in touch with the lender to try and find common ground. Repossessing a home is a tedious process for all the parties involved. Open communication with your lender can help you find a solution to the problem. A lender can provide different options such as refinancing, repayment plan or loan modification.

Refinancing is when a lender gives you a new loan with new terms and interest rates to help you cover the payments that you missed on the mortgage. You can also work together to come up with a repayment plan that suits your budget for you to start making payments gradually. They can also modify your loan by changing the terms of the mortgage to make it more manageable. For instance, they can reduce the interest rates or extend the duration of payment.

Think about filing for bankruptcy

If the other options do not work, filing for bankruptcy can prevent you from losing your home. Seek guidance from a bankruptcy lawyer or attorney to take you through chapter 7 and 13 to delay foreclosure.

By filing for bankruptcy, the court is forced to issue an order for relief which includes automatic stay. This can make your creditors cease any collection activities instantly. The court legally postpones the foreclosure for a couple of months so that you get enough time to fight for your home as you look for alternatives to make repayments.