House Forclosure

Options For Preventing Foreclosure on Your Long Island Home

If you receive a notice of default, take heart. All is not lost! Even at this late stage, you can still use one of the five strategies below to help stop a foreclosure. If you are located on Long Island and need to sell your foreclosed home fast please do not hesitate to call Abstract Home Solutions.

1. Foreclosure Workout

All the way up until the time that your home is scheduled to be auctioned, a majority of lenders would prefer to work a compromise out that will enable you to get back on the right track with making your mortgage payments instead of your home being foreclosed on.

2. Short Sale

After a Notice of Default has been filed by your lender but before an auction is scheduled, if a buyer provides you with an offer, your lender is required to consider it. If your lender forecloses on your house, they will have to try and resell it. However, if you are able to present a short sale offer that is reasonable to them, they might see it as a way to save trouble, effort and time in locating a qualified buyer within a soft market. Therefore, if your house is on the market, you should keep aggressively looking for a buyer, even once the long island foreclosure process has been initiated by your lender.

3. Bankruptcy

Foreclosure is stopped dead in its tracks by bankruptcy. After a bankruptcy petition has been filed, debt collectors, which includes mortgage lenders, are prohibited by federal law, to continue collection activities. Since foreclosure is a type of collection activity, as soon as your lender knows about you filing for bankruptcy, it effectively freezes the foreclosure process. Bankruptcy just buys you some time to financially recover. Your mortgage company, as well as other creditors, are required by law to work with you in good faith to come up with a reasonable payment plan that allows you to get back on track. You should find an experienced bankruptcy attorney to consult with to determine whether or not filing for bankruptcy would be a good strategy for you to employ.

4. Deed in Lieu

In this situation, a homeowner who is faced with a foreclosure will sign the deed on the house voluntarily back to the bank. A deed in lieu actually has the same effect on the credit of a homeowner that a foreclosure does. Lenders are actually quick reluctant to take a house back via a deed in lieu for several reasons: They are afraid the homeowner might sue sometime in the future and allege they didn’t understand what was taking place, the lender must pay off any home equity lines of credit, or second and third mortgages before the deed in lieu can be executed, and the lender wants to be sure that the borrower really does have financial difficulties. For these reasons, a deed in lieu is rarely ever granted.

5. Lease Option/Assumption

These days, a majority of loans are not assumable. However, if you are faced with a foreclosure, you may be able to get your lender to make a modification to your loan, so allow your loan to be assumed by another buyer. With a lease-option situation, the buyer is your tenant. You continue to own the properly until enough down payment money has been saved, their credit is sufficiently improved or they have sold their other house. You can arrange an option payment, which gives a buyer the right to purchase your home. This option payment needs to be enough to bring your mortgage current to get the foreclosure process stopped. https://youtu.be/ikV-mjWBnhk

Leave a Reply

Your email address will not be published. Required fields are marked *