Strategies of a Landlord Avoiding Foreclosure

House Keys, Stack of Money and Foreclosure Notice - Cash for Keys Program.

Falling behind on mortgage payments means that dark cloud of foreclosure is hovering over your head. Use the following strategies to stop that foreclosure in its tracks.

File for Bankruptcy: You can stop the foreclosure immediately by filing for bankruptcy. A process calls “Stay” goes into effect as soon as you file for bankruptcy. Your mortgage lender is prohibited from foreclosing your home during this process. If your mortgage lender seeks permission to continue with the foreclosure, the process can still be delayed for about two months. Use that time to communicate with your mortgage lender and find alternatives to the foreclosure.

Apply for a Loan Modification: When you apply for a loan modification, the mortgage lender is prevented from going forth with dual tracking. If you are approved for the loan modification, the foreclosure will be stopped for good. All you have to do is keep up with the modified payments, and you will not have to worry about the foreclosure.

File a Lawsuit Against Your Mortgage Lender: You can file a lawsuit to stop the foreclosure if your mortgage lender is completing the foreclosure without using the court system. The lawsuit could delay or stop the foreclosure process altogether. You will have to prove the mortgage lender is using a nonjudicial process to complete the foreclosure. Examples may include the mortgage lender violating the Homeowner’s Bill of Rights, failing to follow the required steps of the process and not complying with the state mediation requirements. If your mortgage lender is using the court system to proceed with the foreclosure, then filing a lawsuit will not work.

Get Help From a Housing Counselor: Housing counselors are dedicated to helping borrowers avoid foreclosure at little to no cost. The counselors work with you to reorganize your finances. They will also help you obtain a loan modification with your mortgage lender. The counselors are sponsored by the U.S. Department of Housing and Urban Development.

Go With Mortgage Refinances: Mortgage refinance is when you take out another mortgage with better terms. You can reduce your monthly payments and interest payments. Your lender may also allow you to borrow from a cash-out mortgage. You can use the extra money to pay off your current mortgage. Keep in mind that a cash-out mortgage may increase your monthly payments.

Using these strategies can help you stop foreclosure and avoid an uncomfortable event for your tenants and yourself.

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