If you've fallen behind on your payments due to circumstances beyond your control, and you're facing foreclosure, don't go down without a fight. There are steps you can take that might be able to stop the foreclosure. However, you'll need to act fast. The last thing you want to do is wait until the very last minute to take action. As soon as you begin getting the notices from your mortgage company, you want to remain in contact with them. Here are four important steps you should take that can help you keep your home.
Request Payment Postponement
If you were always on time with your payments before you fell behind, you should talk to your mortgage company about a temporary payment postponement. Postponing your payments may give you enough time to get out of the financial crisis you're facing. In some cases, mortgage companies can move several payments to the end of your contract. While this action will extend the length of your mortgage, it will give you the time you need to catch up without losing your home.
Apply for a Loan Modification
If you're facing a temporary hardship that will resolve itself given time, you may want to consider applying for a loan modification. With a loan modification, the contents of your original loan will be changed to allow a longer loan period, or a reduced interest rate. You may also be given the opportunity to make interest only, or principal only, payments, which means the bulk of the monthly payment will be reduced.
Sue Your Mortgage Company
If your mortgage company is using less-than-legal avenues to foreclose on your home, you'll want to talk to an attorney about filing a lawsuit. This option will only work if your mortgage company is not going through judicial channels to foreclose on your home. However, if they're operating outside of legal channels, you may be able to buy enough time to avoid the foreclosure altogether.
File for Bankruptcy Protection
If you've exhausted all other avenues, and you're still facing foreclosure on your home, you need to talk to an attorney about bankruptcy protection. In most cases, filing for bankruptcy will stop the foreclosure until your case proceeds through the court system, and your bankruptcy is discharged. Depending on the bankruptcy chapter you file for, you may be able to keep your home, while having the monthly payments reduced to an amount that you can afford.