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How can I Stop Bank Foreclosures?

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By : John Cutts    99 or more times read
If you're in default on your home mortgage and facing a bank foreclosure, there are several steps you can take to stop the bank foreclosure from happening. Foreclosure rates are soaring, and you don't want to become a statistic. The first thing to do is to contact your lender immediately and find out if there is a way to make up your default debt without going to foreclosure. If you get in touch with your lender soon after a default occurs, they will usually be willing to work out an alternate payment plan or give you a chance to catch up with overdue payments.

It's also important to be aware of government-sponsored foreclosure help available to homeowners. There are plenty of HUD and federally sanctioned foreclosure assistance centers all over the nation with the sole purpose of providing defaulted homeowners with the help and information they need to stop foreclosures on their home. Through these programs, you can learn how to deal with a default, how to negotiate with your lender and even learn about loan modification and refinancing options available to you under the recent foreclosure legislation.

Home refinancing and loan modification can be a great option, because it allows you to get out from under an unmanageable mortgage by taking out a new one at a lower monthly interest rate. If you refinance, you can lower your monthly payments and make your mortgage loan much easier to afford. Another idea is to become one of the many foreclosed homes for rent; if you have somewhere else to go, you can rent your home to someone who can meet the monthly payments and avoid a foreclosure.

The final step to consider is to sell your home, either through an agent or by a short sale. An agent sale can only happen if you have enough time before a foreclosure is scheduled to occur, so be sure to consult both your lender, your attorney and a real estate agent before taking this approach. But selling your home as a preforeclosure is often a good option, because it allows you to pay off the lender and, sometimes, keep a little profit for yourself.

If your home won't fetch the full value of your mortgage loan in a public sale, then you can ask your bank or lender to pursue a short sale. A short sale uses the sale amount to pay off your debt and avoid a foreclosure. The bank or lender saves by not pursuing a costly foreclosure, and the homeowner avoids having their credit ruined by getting a foreclosure on their record.

Finally, your last resort can be declaring debt bankruptcy. Bankruptcy isn't for everyone, but if no other options remain, it's worth looking into.

Trying to stop a bank foreclosure requires you to take action as soon as possible. So consult your lender, a local HUD office and a foreclosure counseling center, to get on the right track to stopping a bank foreclosure.
John Cutts has been educated in the finer points of the foreclosure market over 5 years.

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