Foreclosure Advice 1: Explain your situation to your lender. If you can’t afford the mortgage, the lender may accept some equity in the property, and in return, cancel part of the loan.
Foreclosure Advice 2: The Soldiers and Sailors Civil Relief Act of 1940 may help you or someone you know who has been called to active duty in the military. The law may help reserve component service members from many legal and money problems such as reduced interest rates on mortgage payments and credit card debt, protection from eviction if your rent is $1,200 or less, delay of all civil court actions, such as bankruptcy, foreclosure or divorce proceedings.
Foreclosure Advice 3: Occasionally, a lender will accept interest only if you can prove that your problem is temporary. This will reduce your mortgage payment considerably.
Foreclosure Advice 4: Negotiate a complete payment moratorium. If the lender believes there is adequate equity in your property, he may be willing to negotiate a short-term hold on your payments.
Foreclosure Advice 5: Offer additional collateral. If the loan value is close to the value of the property, and the lender believes he may take a loss through foreclosure, then offer additional collateral as an alternative to foreclosure.
Foreclosure Advice 6: If you have a short-term or high-interest loan, refinancing may substantially reduce your monthly mortgage payment.
Foreclosure Advice 7: If your interest rate is below the current rate, the lender will, of course, not be interested in negotiating with you on any terms because he’s not making money on your loan. You may need to renegotiate higher interest which, while costly, may be more feasible than refinancing.
Foreclosure Advice 8: If you have equity in your property, a second mortgage may be just your answer. The second mortgage can give you the money necessary to bring the first mortgage current.
Foreclosure Advice 9: Propose to share home equity with a third party. If the lender won’t trade part of the loan for a share in the property, it may be an attractive investment to some other investors.
Foreclosure Advice 10: If you can’t refinance or obtain a second mortgage, borrow against some other valuable asset such as car to bring the mortgage current.
Foreclosure Advice 11: Sell your home. If you simple cannot afford to own your house, then sell it as quickly as possible to pay the loan. It preserves your equity and avoid bad credit report and costly attorney fees.
