Stop Foreclosure – Know Your Options Before It’s Too Late

If your home is going into foreclosure soon, you’re not alone. During the COVID-19 pandemic, which remains persistent even in 2021, the U.S. federal government responded to the economic fallout, passing the CARES Act. If you want to stop foreclosure in its tracks, you need to know your options before it’s too late.

A significant part of that legislation is a moratorium on foreclosures. If you’re behind on your mortgage payments, that’s considerable foreclosure help that you can’t afford to ignore any longer.

Indeed, there are government programs to help pay mortgage expenses, but those solutions are the last resort once you’ve gone through all of the options discussed below. Without a doubt, foreclosure can be a stressful process, so the following information goes over what you need to know before you get in over your head and try to avoid foreclosure on your own.

What Does It Mean When A Property Goes Into Foreclosure?

Failing to make mortgage payments on time is what eventually kicks off the foreclosure process. When a property goes into foreclosure, it means that your mortgage lender will ultimately take possession of the home, evict you from the premises, and re-sell the property after the process is complete.

Overall, it may take several months to complete a foreclosure, from the first notice of default to the home’s final sale. But sometimes, a foreclosure can move relatively quickly, leaving your head spinning as you wonder how it all happened so fast!

Since states differ in how they administer foreclosures, your home state could have a few ways to stop foreclosure fast. Still, overall, the process and the remedies are generally the same across the country.

What Does The Foreclosure Process Look Like?

Initiating foreclosures usually follows a similar track no matter which state you live in.

According to the Consumer Financial Protection Bureau (CFPB), you have as many as 36 days after you miss a payment to contact your mortgage lender in good faith. Most people choose to reach out over the phone since lenders operate entire departments dedicated to helping out homeowners who’ve fallen on hard times.

You may not know that there are loan modification programs that you could try to stave off foreclosure before it’s too late.

The CFPB also says that your lender must inform you in writing before you’re delinquent on payments for 45 days. By law, your lender must explicitly and clearly tell you what your options are in each subsequent mortgage statement and what will happen if you fail to address the late payments in a timely manner.

But once you’re delinquent for more than 120 days without a loan modification or other assistance, your lender can begin the actual foreclosure proceedings.

That’s the general course of a foreclosure, but again, it’s important to remember that states differ in how they handle them. For example, some states require that lenders file a lawsuit before starting a foreclosure. Others allow mortgage lenders to proceed without filing a lawsuit first.

What Does Forbearance Mean?

Forbearance is when your lender gives you a brief respite and lets you make arrangements to catch up on mortgage payments.

Unfortunately, it’s common for homeowners to misinterpret what forbearance really means. You’ll still have to make the payments; the lender will just be giving you more time and outline a plan you must follow to return to good standing.

Can You Stop A Foreclosure Once It Starts?

The short answer is this: You have the right to contest a foreclosure all the way up to the day of the lender’s auction. But it’s not wise to wait until the situation is irreparable. You can take action, but you have to be proactive.

Stopping foreclosure once it starts usually requires a lot of effort, but if you genuinely want to save your home, it’s worth the fight. Often, what causes you to miss mortgage payments isn’t necessarily your fault, but it is your responsibility to know your options to buy yourself some time.

Some states will allow you and your lender to make an arrangement on a short sale if it means that they won’t have to take possession of your property to re-sell it. From the lender’s point of view, if the housing market is soft, agreeing to a short sale may be the more attractive course.

Another way to stop a foreclosure in its tracks is to file for bankruptcy, but be careful about using it. Bankruptcy law is complex, and your situation may qualify you to restructure your loan and keep your home; however, in some cases, bankruptcy won’t save your home.

Are There Government Programs To Help Pay Mortgage Costs?

The short answer is YES. There are a few government programs to help pay mortgage costs, but most of the time, you have to have a government-backed loan through the Federal Housing Authority, for example. VA and USDA programs also have to help mortgage holders make payments and catch up financially.

When Is It Too Late To Stop Foreclosure?

A common question is: Can I sell my house to avoid foreclosure? And the typical answer is, it depends on your unique situation.

It’s too late to stop a foreclosure once you can’t sell your home, or you can’t declare bankruptcy to halt the process.

How To Stop Foreclosure At The Last Minute

So that said, how do you stop foreclosure now if you’re receiving regular delinquency notices?

The fastest way to stop foreclosure at the last minute is this: Reach out to your lender and explain your situation as soon as possible, and don’t wait a minute longer.

Time is on your side if you go through all of your options because the bank does, indeed, want you to catch up on payments. It’s common for lenders to lose money in the end or break even after a home auction.

At the end of the day, stopping foreclosure takes effort, but you have plenty of options at your disposal before losing your home.

Want To Learn How To Stop Foreclosure Now?

So, are you in foreclosure and want to learn how to stop foreclosure now?  We’ve created free online guides to help homeowners just like you find out your options on getting out of the sticky situation you’re in right now.

You aren’t the first person to go through a foreclosure… and won’t be the last.  So don’t feel ashamed. It happens.

The best thing you can do right now is to educate yourself on your options.  For some people selling your home is the best option, sometimes we’re able to help homeowners STOP FORECLOSURE completely, and sometimes there are other options. we’ll make a fair all-cash offer on your house today, just let us know about your situation.