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Save Your Home and Stop the Foreclosure Sale

Foreclosure is an increasing problem, with more homeowners dealing with foreclosure each year. Statistics show that in the first quarter of 2008, a nationwide average of one out of 194 households was in foreclosure. Foreclosure is a difficult situation for everyone involved. All you probably want to do is stop the foreclosure sale and save your property. Still, the collection calls and letters begin to come leaving you to stress and worry about what you can do.

On a better note there are some solutions to fix the problem and stop a foreclosure sale but only if you are familiar with your options and act quickly. The most important factor is time. If you can address the situation prior to the lender submitting a "Notice of Default", you'll have a much better chance of having a good outcome.

If you have already been given a notice of foreclosure sale, or "Sheriff's sale" depending on your jurisdiction, you are running low on time. Each day that the sale draws near, you have fewer options except for bankruptcy (we'll come back to that in a moment).

Here we will talk about a few popular ways to avoid foreclosure

Dealing Directly With Your Mortgage Lender

There are several arrangements that you can come to with your lender to stay a foreclosure sale. Among the most common are loan modifications, short sales, repayment plans and more. Each of these solutions require you to negotiate with your mortgage lender. In some cases, the services of a foreclosure specialist can be beneficial as they can negotiate on your behalf.

Filing For Bankruptcy

Bankruptcy is usually a last effort, not something you would choose on merit of the foreclosure alone. If you have other debt problems and little to no income, however a bankruptcy could be the right answer for you. There are two basic types of bankruptcy - a chapter 7 and a chapter 13. A chapter 7 is a temporary fix but will delay the foreclosure until the lender gets the permission of the bankruptcy court. A chapter 13 is designed to payback creditors by developing a court structured repayment plan. Your home loan can be one of the debts considered for a repayment plan, provided that both sides agree or the court delcares. Do know that choosing bankruptcy can have serious consequences for you in the long term.

Have You Considered a Refinance?

Depending on your income, credit, and equity it might be possible to locate a lender who could refinance your entire loan. If this were the case, you could payoff the foreclosing lender and stop foreclosure. You will have to pay all of the penalities and fees. Many homeowners choose the refinance option, but they only work in situations when you have positive equity in the home.

Deed in Lieu of Foreclosure

If you are in a situation where you can not continue to afford your home, you might be considering a "Deed in Lieu of Foreclosure". A deed in lieu of foreclosure is literally giving the house to the bank. Although you can't keep the home, you can prevent a stressful foreclosure that ends the same way.