The foreclosure process begins once you receive a Notice of Default (NOD) from your lender. This notice is issued once you have become delinquent on your mortgage payments for at least three months. While you may be feeling defeated by the thought of foreclosure, you do have other options. There are things that you, as a homeowner, can do to try and avoid foreclosure.
Work Out a Loan Modification with your Lender
Many lenders will work with you to get your mortgage payments back on track. Depending on the situation, your lender could agree to a repayment plan, also known as forbearance. They may add monthly fees to your mortgage until you can catch up on missed payments. There may be a chance to work with the lender to adjust the loan, such as freezing or lowering the interest rate for a period. If you have equity and meet certain guidelines, you may be able to refinance your loan and have the back payments added to your loan balance.
Initiate a Short Sale
If the foreclosure process has begun, there is still time for you to find a buyer for your home to stop the foreclosure from being finalized. You are permitted to find a buyer once the lender files the NOD, but the short sale of the home must be final before the foreclosure auction is scheduled. If your home needs repair work done, a short sale offer can save the lender money when it comes to repairs, time, and effort because a short sale is an “as-is” sale. A short sale also has better effects on your credit.
Sign the Deed to your Property over to the Lender
You have the option to sign a Deed in lieu of Foreclosure over to the lender. Essentially giving up your home to the lender still affects your credit as much as a foreclosure would. Lenders do not have to agree to this option. You could sign over your property, and they could still foreclose for the remainder of the debt owed. To better your chances of being accepted, provide the lender proof of financial distress, communicate that you are voluntarily requesting a deed in lieu and that you have not been successful in other attempts to bring the mortgage current or repay the debt.
Exercise your Right of Redemption.
Nevada allows the property to be redeemed before a foreclosure. The redemption period applies to borrowers in foreclosure. You must request a payoff quote from the lender to determine how much is required to satisfy your debt. You must also be prepared to pay the full amount of mortgage payments in arrears and fees due. You can exercise your right any time between when you receive a NOD and the foreclosure sale.
File for Bankruptcy
When you file bankruptcy, collectors can no longer contact you for payments. Bankruptcy puts a halt to the foreclosure process and provides you time to negotiate a payment plan with your lender and creditors through the court to help you get back on track. Bankruptcy has several negative consequences as it stays on your credit record for seven years and can prevent you from making significant purchases, owning property, opening financial accounts, etc.
You need an experienced debt and foreclosure attorney to advise you and act in your best interests. Contact Debt Rescue Law Firm for a FREE consultation at (833) 707-1234.
