OK I have 11 choices for you. The number 11 just didn’t seem to be as catchy as 10, and the intent of the title is to get you to read the blog. There are 11 solutions to a foreclosure that you can choose from. They range from choices that enable you to keep your home, protect your credit or hurt you in unnecessary ways. There are also so called solutions that don’t work such as mortgage elimination which I will address in a future blog. If you are thinking about mortgage elimination please Google “mortgage elimination” and research the topic. I will explain each solution so that you can make a decision that is best for you and your family’s future. After all, your family’s future is the most important aspect of the entire foreclosure process.

1- Reinstating your loan is the least expensive and most effective way to stop your foreclosure. It is least expensive in terms of legal costs and any other associated costs not including the back payments. It is also the hardest to do because it requires you to pay all of the back payments plus attorney’s fees to your bank. If you have equity in your home it may be possible to get a hard money loan secured by the equity in your home.

2- Loan Modification is all the rage right now. In my experience it is the first thing people think of when they start to fall behind in their mortgage payments. Working on a modification is very stressful, takes dedication and great follow-up skills. You also need to qualify financially and have had some sort of hardship in the past that put you in the situation you are in. I have helped people at no cost that have successfully negotiated a modification with their bank. I have also been able to refer people to professional legal firms that their only business is foreclosure issues. Please call Gary at 801-635-4756 for a free consultation to decide which is the best for you: doing a modification on your own or hiring an attorney. The following link has great information about modifications www.checkmyNPV.com

3- The next most popular solution to a foreclosure is a short sale. As you know, a short sale is when you sell your home for less than it is worth. This is a great way to position you and your family for future home ownership if that is what you desire. A short sale has the least negative effect on your credit out of a foreclosure, bankruptcy or short sale. With some credit repair and a good plan you can purchase a home in two years. Of course I can help you every step of the way.

4- You can sell your home without doing a short sale if you have equity in your home. Good planning can make this a very positive outcome if you act in a timely manner.

5- Bankruptcy is an option a lot of people take. Let me start off by saying that for some people bankruptcy is a good alternative. Having said that, in my opinion, you should only file bankruptcy as a last resort. A bankruptcy DOES NOT STOP a foreclosure; it only postpones it. The payment schedules are also very strict. It is possible to file bankruptcy only to postpone the foreclosure so you can have time to negotiate a sale or short sale of your home. This can be the only alternative to foreclosure if you wait until a sale date has been issued for your home. This link can answer many of your questions about bankruptcy or you are welcome to call me to discuss at 801-635-4756 http://www.debtworkout.com/c13faq.html

6- Forbearance may be an option if you have a loan with a good fixed interest rate and the situation that caused you to become behind in your house payments is corrected. In general the bank will agree to give you more time than the standard foreclosure period to get caught up on your mortgage.

7- Walking away from your home should NEVER be an option. This is the worst case for your credit and can take the longest to recover from. Even if you have to leave your home for any reason, a sale or short sale can be completed even of you are half a Country away. Never do this.

8- Short term financing or a hard money loan is a possibility if you have equity in your home. Sometimes a credit union will give you a loan if you have equity in your home regardless of your credit scores. A hard money lender will usually give you a loan secured with your equity but the interest rates are higher than a normal mortgage. Be very careful if you go this direction. Read and understand every word in every document you sign.

9- Refinancing is usually not an option but if your payment is only one or two months behind your current bank may be willing to work with you on a refinance.

10- Deed-in-Lieu of Foreclosure is where you give the deed to your home to the bank and the bank becomes the owner through a formal document. These agreements can be difficult to obtain and you should certainly consider a sale or short sale first.

11- Rent your home is an option if you can’t afford your payment but the market will support enough rent to cover your payment. This can give you time to downsize and then move back into your home sometime down the road. You will have to bring you mortgage current though.

Keep in mind that a solution that directly involves your bank is subject to their procedures, work load and even the person you are working with. Each bank is different and each representative is different which means what worked for one person may be totally different for another person in a similar situation.

Remember, take action and start the process whatever you plan to do.