Stalling Foreclsoures: What Are Your Options

Foreclosure is not the first step after a mortgage status has changed to defaulted. There are notice of defaults, contact from the lending agency and surprising to the belief of many homeowners; foreclosure is seen as the last option.

Foreclosure is an expensive process and contrary to popular belief the lending company would like to avoid foreclosure at all costs. Before foreclosure, or even pre-foreclosure occurs the lending company makes many attempts to contact the homeowner with other options. Very few homeowners take advantage of these tools, these options - and so many allow the home to be sold, when there was so much that can be done to keep the home in the hands of the rightful owner.

Here are some actions that homeowners facing foreclosure can take into account with the lending company, the community and within themselves. Keep these in mind when facing defaulted payments, or foreclosure.

First and foremost, once a mortgage has been defaulted, even once - it is important to contact the lender. The lender will have options available to rectify the situation, and avoid the unfortunate situation again. Whether lowering the interest rates, or increasing the term of the loan - the lender is always going to try to come to a solution that does not involve foreclosure.

Contact a lending association that can act as an advocate within the situation between the lender and the homeowner. There are three options that the homeowner has when contacting a lender to inform that payments are going to be late, or are unable to be made at all. First, the homeowner could ask the lender for forgiveness on the payments that have been missed. Second, the lender could be asked to increase the term of the loan to spread payments over a longer period of time. Decreasing the payments could make the monthly payments more manageable, and assist in avoiding foreclosure. Third, the payments that have been missed may be added to the principal of the loan in the form of back payments, allowing the homeowner to get back on their feet and pay the mortgage to date.

Forbearance, after the loan is in default is another option to the homeowner. Forbearance allows the lender and the homeowner to come to an agreement in which the homeowner has a certain amount of time to pay the balance owing on the home. During this time the lender will not take legal action against the homeowner, so long as the payments are being made.

If there is no way that the homeowner is able to make the monthly mortgage payments than the best option is to sell the home before it goes into foreclosure, this way - the homeowner is able to take advantage of the equity within the home. Hire an appraiser to assess the value of the home to determine the asking price. Consider hiring a real estate agent that will have the ability to sell the home quickly, and make the most of the market.

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