Should you receive a notice of foreclosure from your mortgage lender, it’s critical that you take immediate action to protect your property and legal rights. If you simply hope for the best, it won’t be long before you’ve lost your home.
On the plus side, there is more than one way to protect your home against foreclosure. Here are some defenses you should consider:
- Loan modification: If the terms and conditions of your loan are making it impossible to stay current with your payments, it’s time to consider a modification. Contact your lender, let them know what you’re up against and see what they can do for you. For example, they may be able to add missed payments to the end of your mortgage, thus giving you a fresh start.
- Short sale: This allows you to avoid foreclosure, but it also forces you to leave your home. A short sale comes into play if you owe more on your house than what it’s worth. If your lender agrees to it, they allow you to sell the home for less than what you owe, and then write off the loss.
- Bankruptcy: It’s a big step, especially when you have so many other financial concerns, but it could be the best way to save your home from foreclosure. Once you file, an automatic stay stops your lender from taking collection activity. This gives you the opportunity to take a breath, review your situation and implement a strategy that’ll work for you in the future. And should you decide on Chapter 13 bankruptcy, you may be able to make up missed payments through your repayment plan, which is often the best way to save your home.
Just because you receive a notice of foreclosure in the mail doesn’t mean that you’ll lose your home in the near future. You have options, ranging from a loan modification to filing for bankruptcy.
Once you settle on a plan, carry it out until you achieve the desired result. This allows you to protect your legal rights, while staying in your home for as long as you want.