One tough break seems to lead to another. If you get behind on mortgage payments, you could be in danger of having your house foreclosed upon by the bank. Lenders foreclose on real estate to recoup their losses. But this means you won’t have a place to live.
Let’s go through the four best last-minute steps you can take to avoid foreclosure from ruining your credit.
4 Last Minute Ways to Avoid Foreclosure
Know Your Mortgage Rights
If you know you are in danger of foreclosure, take out your original mortgage before you do anything else. Review the sections on penalties and what the lender may do if you miss payments. Also, explore the foreclosure laws in Michigan by contacting the State Government Housing Office. If you need further help from legal experts, contact the team at Aldrich Legal Services.
Sell Your Home
One of the best options for you is for you to sell your home to gain the money needed to pay off the outstanding bank loan. Until the bank puts your house on an auction market, you are still able to make a sale. Beware of predatory agents who will take additional fees due to your situation.
Negotiate a Short Sale
If you don’t think you will have enough time to complete a traditional sale, consider a short sale for your house. A short sale occurs when the house sells for less than the outstanding loan amount. The lender takes the sale money and forgives the rest of the debt. Make sure to get in contact with the lender before beginning this process.
If you choose to use a short sale, understand that this option will impact your credit, though not as much as a foreclosure would have hurt your credit.
File for Bankruptcy
Bankruptcy immediately halts the foreclosure process. Once you file the petition, no more collection activity - including foreclosure - can take place until after the proceedings. Until your suit goes to court, you will have time to recoup any losses and set up a good faith repayment schedule with all your lenders.
Being involved in foreclosure can be confusing and scary. There are legal options for you to explore before giving up hope on your home. The attorneys at Aldrich Legal Services are here to help review your situation and get you the best outcome possible. Contact us today at (734) 404-3000 to see how our team can ease your difficult situation.