Real Estate Innovation

Tips to Stop Foreclosure Fast

What is the fastest way to stop foreclosure? Ultimately paying off the loan, but if you were in a position to do that you wouldn’t be in foreclosure in the first place. Don’t despair. There are still techniques to stop foreclosure fast. Keep reading to learn about popular ways to stop foreclosure quickly.

Loan Payoff / Refinance

A refinance to avoid foreclosure is only appropriate in some cases. If you have ample equity in your home and a stable income, you may be a good candidate for a refinance payoff. This is when a bank finances a new loan, supplying the money to pay off the original mortgage plus any fees and penalties. By paying off the mortgage, you prevent foreclosure. If you have an adjustable rate loan that has recently ballooned, you may be the perfect candidate for a refinance loan as well.

Bankruptcy Filing

Both a Chapter 7 and a Chapter 13 bankruptcy will delay a foreclosure while the parties wait on the bankruptcy court to allow them to proceed. Bankruptcy of course is a last choice that comes with it’s own set of pitfalls, namely the damage to your credit. It’s never a good idea to declare bankruptcy just because of the foreclosure alone.

Short Sale

A short sale is when you come to an agreement with the mortgage lender that allows you to sell the home for less than you owe and have that considered as satisfaction of the loan. If you are thinking about a short sale, you must have all of your math in front of you and speak to your lender with the exact details to find out if they would permit a short sale for your property. You should know that there may be tax implications to a short sale.

Deed in Lieu of Foreclosure

If you are not able to keep the home, it can be better to avoid the end of the foreclosure process by offering a “Deed in Lieu of Foreclosure”. This is also good if you owe more than the home is worth and your bank will accept it. A Deed in Lieu of Foreclosure is returning the property to the bank to stop foreclosure fast. It can be a good solution if you are not expecting to keep the property.

All of these are common ways that homeowners use to stop a foreclosure at the last minute. In a perfect situation, you would have more time to decide what to do. When it comes to foreclosure, the more time you have the more options you have to chose from.