Is There a Foreclosure Fix?
Question: I need a foreclosure fix! How can I get my house back once the foreclosure process has started?
Answer: If you have defaulted on your home loan, you may still have an opportunity for a foreclosure fix by finding an opportunity to keep your home and stave off the foreclosure process.
As soon as you receive your first late notice—or preferably before you receive it—consider contacting your lender to work out an alternative payment plan or loan modification. If the foreclosure process has started, though, and you want to hold on to your property, you may have a few options.
The foreclosure process usually begins when you are three to six months behind in your payments. After such a period of delinquency, you will receive a Notice of Default, which formally puts your home into the foreclosure process. However, between the time that you receive a notice and when your home is sold, you may find a way to prevent or nullify the sale.
The first foreclosure fix depends on where you live. Some states offer a redemption period, a foreclosure provision that allows you to recover your home. Foreclosure laws in some states give home owners five days to buy back their house by paying the amount owed on the loan and any related late fees or other penalties. Some lenders might allow you to resume the loan if you can make a single payment that will bring yours back into good standing with your payment schedule.
If your state does not offer a redemption period, it might offer you a similar opportunity if your home is not purchased in the distressed property auction known as a sheriff’s sale. Again, you might have five days to make restitution to the lender or else risk losing your property.
If you cannot afford to pay the amount in full to get your home back, then you can look at other options to begin to halt the process as a temporary foreclosure fix. With foreclosures still a common occurrence through the nation, many lenders might be willing to work with you to prevent a foreclosure, since a foreclosure usually means a loss in their ledgers. Some lenders may offer refinancing or enrolling in a loan modification program. Others might be wiling to allow a short sale. (Read the post, “What Is a Short Sale?”
When it comes down to it, there is no quick fix for the foreclosure program. Your best bet at a foreclosure fix is to learn how to create a budget and trim expenses, then begin the loan modification process.