Foreclosure Prevention Begins Before Process Is Started
The time for homeowners behind in their house payments to begin thinking about foreclosure prevention is before the notice arrives that the lender intends to take that action. In a real estate market when mortgage qualifications become more strict, there is also less leniency for borrowers who get behind in their payments. However, all things considered the number one way to help with foreclosure prevention is communication between the borrower and lender.
The homeowner is going to know when they get behind and will also receive a reminder from the lender. This is the ideal time to contact them and try to work through the issue. Make no mistake, the lender's first concern is for the loan on the house, but most are more than willing to work with their customers on foreclosure prevention. When a home mortgage is foreclosed upon, there are no real winners.
There are a few ways lenders work with borrowers on foreclosure prevention, including separating the past due payments into a separate loan and as long as the borrower makes payments on the past due amount while keeping up the regular payments, the foreclosure process can be avoided. However, the foreclosure prevention attempt will fail if more payments fall into the late statue or the payment on the past due amount is not made.
Seeking Outside Help To Stop Foreclosure
Some borrowers may not have a good relationship with the lender and will not be able to work out arrangements for foreclosure prevention. Obviously, the best and most efficient means of foreclosure prevention is to make up the past due payments as quickly as possible and then keep up to date. It might be possible to find another lender to loan money for the past due payments, but this will depend on the equity in the home as well as the borrower's credit history.
Personal loans from family and friends may also be available in order to make up the payments and some lenders may be willing to move payments to the end of the loan for the purpose of foreclosure prevention. Essentially, the past due amount is moved, usually for a small fee, and instead of being considered late, will add that much time to the length of the mortgage agreement.
As a last resort, foreclosure prevention can be realized through the filing of Chapter 13 bankruptcy. The program places all of the borrower's debt into a court-mandated debt reduction program, including past due mortgage payments. As long as the payments are made through the court, and the regular monthly payments are made, foreclosure can be stopped.
