How to halt a foreclosure

Minnesota homeowners facing foreclosure should not give up hope of keeping their home. In many instances people can stop or delay the process. The important thing to remember is not to panic. There are several creative solutions that could save a home depending upon one's financial situation and lender.

If homeowners are facing late or missed payment, they need to speak with their lender. Sometimes, a single phone call can initiate a plan to modify a mortgage and prevent foreclosure. Those considering that option should examine assets that might be sold for cash to make mortgage payments. Retirement funds may be available, but people should be aware of possible penalties and tax implications. If a lender is willing to talk, there might be a number of options available. The lender might be willing to lower an interest rate that is above market to the market rate or extend a loan, thus decreasing how much is due each month.

Lenders might reinstate a loan after receiving a couple of months of back payments plus late fees. A payment or two might also be made up with a repayment plan that includes larger than normal payment amounts that eventually make up the difference. A forbearance might be issued to temporarily change terms. Cash advances, loans and bankruptcy are other possibilities. Refinancing to get a loan with lower mortgage payments early on is another action to consider. If nothing else works, selling the house could save one's credit and bring in a higher amount for the property.

With the array of choices and the potential drawbacks, such as increased taxes or negative impact on credit, it could help to consult an attorney. An attorney might offer suggestions involving bankruptcy or other solutions that might help people both keep their property and get relief from debt.

Source: Realty Trac, "Stopping a Home Foreclosure", December 08, 2014

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