A staggering number of homeowners face foreclosure each year, and many sadly wind up losing their homes. For many, the economic crisis and the housing bubble lowered the value of their home and made their mortgage payments unaffordable.

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Unfortunately, many homeowners simply don’t know how to stop a foreclosure and lose their home to the bank. The good news is that homeowners have several options when it comes to stopping foreclosure.

Consider Loan Modifications or Refinancing Options

Loan modifications and refinancing are two options that you might consider in the early stages of the foreclosure process.

The mortgage company may offer you several options that can help you avoid foreclosure and make your payments more affordable. This may include refinancing the loan or another option proposed by your lender to help you catch up on missed payments. For many homeowners, applying for a loan modification or refinancing is the first step to stopping foreclosure.

Many homeowners also attempt to negotiate with their lenders. Some will agree to add the missed payments to your loan’s current balance and stretch out your payments over a longer term. This will lower your monthly payments, but increase the amount of interest you pay.

The government also offers several programs under the Making Home Affordable Program (MHA) that can help you avoid foreclosure, including:

  • Home Affordable Modification Program (HAMP): Those who qualify for the HAMP program can have their monthly payments reduced to just 31 percent of their verified pre-tax income.
  • Principal Reduction Alternative: This program helps homeowners with “underwater mortgages” by encouraging investors to reduce the amount of money you owe on your home.
  • Home Affordable Refinance Program (HARP): If you’re current on your mortgage but your payments are becoming unaffordable, HARP can help you refinance if you’re ineligible for traditional refinancing through the bank.

The HUD website offers more information on how to apply for MHA programs and how to stop a foreclosure.

Consider Selling Your Home

When homeowners search for help on how to stop a foreclosure, one of the first suggestions experts make is to sell the home. While it may be a difficult decision, it is one that can help you avoid foreclosure and the consequences that come along with it.

Our Home Ownership documents can be used to help you complete the sales process. If you have any legal questions regarding the foreclosure process or selling your home, we can provide legal advice for you.

Consider Filing for Bankruptcy

Filing for bankruptcy is typically a last resort, but it may help with stopping foreclosure proceedings. For some homeowners, filing Chapter 13 is the only way to save their home.

Filing for Chapter 13 bankruptcy will allow you to repay your late unpaid payments over a specified period of time. It’s important to keep in mind, however, that you will need to still have enough income to make your current mortgage payments on top of the arrearage payments. If you can afford to make these payments, you may be able to avoid foreclosure and keep your home.

If you’re considering bankruptcy, you may also want to consider hiring foreclosure lawyers. This can be a complicated process and they will have the experience and the expertise to guide you through the process. Foreclosure lawyers may also provide assistance if you plan on fighting a foreclosure in court.

Get startedStart Your Home OwnershipAnswer a few questions. We'll take care of the rest.

Get startedStart Your Home OwnershipAnswer a few questions. We'll take care of the rest.