How to Stop a Foreclosure

Foreclosures are very difficult situations. In the State of Texas, there are two documents that the bank must send before they foreclose on your home. The first is a Notice of Default and Intent to Accelerate. The second notice is the Notice of Sale (which goes out after the first notice period expires). If you see a foreclosure on the horizon, let’s take a look at some of your options. A foreclosure is often not a good time to utilize a realtor because the process will take too long.

Get a deed in lieu

With this option, your lender takes what is called a “deed in lieu.” Essentially, you give up ownership of your home. There are a few caveats to a deed in lieu. Your home needs to be in good condition so that the lender can sell your home. Also, if the fair market value has gone down, the lender may not approve this option.

Bankruptcy

There are different types of bankruptcy. Chapter 7 bankruptcy and Chapter 13 bankruptcy will immediately stop the foreclosure of your home. To keep your home with Chapter 7 bankruptcy, you must be current on payments. In the worst case scenario, you could still lose your home by filing for Chapter 7 bankruptcy, but put off the foreclosure by three to four months. Chapter 13 bankruptcy will let you keep your home, but you will still need to be current on mortgage payments going forward. But bankruptcy is not an attractive option, as it stays on your credit record for up to ten years.

Short Sale

A short sale is when you sell your home for less than what you owe on it. A short sale still impacts your credit, but not as badly as if you had filed for bankruptcy or let the foreclosure go forward. Short sales need to be approved by the lender. Also, the process is long and drawn out.

Modify your loan terms

This is an option that only really works well if you let your lender know in advance that your financial situation is changing. You’ll need to compile your financial records and demonstrate financial hardship. You will also need to apply and be approved for the loan modification. In most situations, you will need to be current on your mortgage payments.

Sell your home for a cash offer

If you are facing foreclosure, a fast cash offer is often going to be your best option. A company like Houston Capital Home Buyers will work with you to buy your home, no matter the condition. Houston Capital Home Buyers will make you an offer in as little as twenty-four hours, and you can cash out of your home in as little as seven days.