foreclosureIn Part 1 of “How to Stop Foreclosure,” we discussed several top techniques for keeping your home, including payment plans, refinancing, renting it out, and selling it. Now, we’re going to discuss some other methods you can use to keep the bank at bay.

5.  Do a short sale. A short sale is what happens when you sell your house for less than the amount you owe on the mortgage. This type of sale is becoming more and more common as foreclosures rise. However, it requires the approval of your bank to do it. Some homeowners try to sell their homes at full price, then ask the bank to do a short sale if they get an interested buyer offering something less. This isn’t the preferred method of doing a short sale. Instead, you should get approval for a short sale first, then put the house on the market at full price, knowing you can sell it for less. You could also put the house on the market at a reduced price and advertise it as such, so potential buyers think they’re getting a bargain.

6.  Offer your bank a deed in lieu of foreclosure. Among the various methods of how to stop foreclosure, this is the least desirable, but still better than losing the house outright. It should be used as a last resort, since it damages your credit (but not as much as if you lost the house through a foreclosure sale). This method is essentially a voluntary repossession of your home. You give the deed and keys back to the bank in exchange for them writing off your loan. This allows you to walk away without owing any money, and get a fresh financial start.

7.  Hire a foreclosure specialist. While it will probably cost you several hundred dollars, the efforts of a foreclosure specialist can be well worth it. A specialist can often negotiate loan workouts with your bank where you can’t. This is because a specialist knows all the legal terminology involved in real estate transactions, and also knows what banks want. A specialist can speak to banks in their own language to get you the loan workout you need to stay in your home, or to at least put off foreclosure long enough for you to make alternate living arrangements.

If you need to learn how to stop foreclosure, it’s better to start educating yourself right away. The longer you wait to do something, the less likely the bank is to work with you. Banks want to save money and do things that will benefit their bottom lines. If the bank has already started proceedings against you, then they’ve already spent money on taking back your home. If you get to them before they spend this money, then your chances of keeping your home become much higher. So, if you’re facing foreclosure, NOW is the time to do something about it!

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

Filed under: Foreclosure

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