foreclosure1If you’re looking for information on how to stop foreclosure, you’re not alone. In the month of October 2008 alone, over 300,000 foreclosures were filed in the United States. Each month, the number of foreclosures only continues to rise as unemployment skyrockets and prices on consumer goods go higher and higher.

If you’re in the position of facing the loss of your home, you’re probably desperate to find a solution. The loss of your home is one of the most devastating things a person can experience, especially if you don’t know where you’ll go next. Fortunately, there are things you can do to stop the process in its tracks. You don’t have to just sit back and lose your home. You can learn how to stop foreclosure.

Steps to Stopping the Foreclosure Process

1.  Don’t ignore letters and phone calls from your bank. This will only exacerbate the problem, as your bank will think you’re unwilling to work something out with them. The bank will be quicker to file legal paperwork against you, and will be able to show that you did nothing to try to remedy the situation. Respond to correspondence from the bank, let them know about your financial situation, and see if they’ll work with you on it. You’d be surprised at how often the bank is willing to come up with a solution for you, such as allowing you to pay back arrears in monthly installments or tacking missed payments onto the end of the mortgage.

2.  Try to refinance. Many people who are in foreclosure situations today are there because they got into adjustable rate mortgages that had low payments to begin with, but that have gone up too high to pay now. If you can refinance your mortgage at a lower rate, you’ll have a much better chance of being able to stay in your home.

3.  Rent out your house. Some homeowners choose this option if they want to keep their home, but can’t afford the payments. By temporarily moving out into a smaller place and renting out your house for enough to cover the mortgage payment, you can keep the bank at bay until your financial circumstances are on track again. However, this will only work if you can get the bank to work out a payment plan with you on any late payments.

4.  Sell your house. It may come down to either selling your house or losing it. If this is the case, selling is the better option, since that won’t damage your credit, while losing it will. If you can sell for enough money to cover your entire mortgage, then that’s the best solution. If not, then try doing a short sale, if your bank will allow it. In Part Two of “How to Stop Foreclosure,” we’ll discuss short sales and other powerful techniques for putting a stop to the bank’s efforts to take your home. You don’t want to miss it!

This is the third installment in our foreclosure series. Be sure to check back for updates…

Filed under: Foreclosure

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