How to Stop Mortgage Foreclosure in 2009 By Marcilio David At Isnare.com Ezine Articles

Do you want to stop mortgage foreclosure? The number of foreclosures jumped 81 percent in 2008. Washington is trying to help with homeowner assistance programs to keep people in their homes. But, if you want to stop mortgage foreclosure, you are going to need to help yourself first.

Many homeowners are not aware that they can stop mortgage foreclosure on their own. But you can save your house. In most states, you can redeem your home up to an hour before it goes to auction. So, being able to line up new financing is key.

You have a number of options available to you if you are facing foreclosure. In this article, we will discuss bank refinancing, short sales, and deeds in lieu of foreclosure.

It used to be that banks would do nothing to stop mortgage foreclosure. They simply allowed you to go into default and then bought the home themselves or sold it at auction. Unfortunately for them, the housing crisis has meant that they now have hundreds of thousands of homes on their books. Many of these are sitting vacant in ghost towns and are virtually unrentable and unsaleable.

Knowing that something has to give, your bank may work with you on getting refinanced and keeping your home. For instance, they might lower the interest rates, tack delinquent payments onto the end of the loan, or provide other loan modification. You can work with the lender yourself or hire a loan modification company to do this for you.

Until the end of last year, the banks were unwilling to work with a homeowner until he or she was 30 days delinquent. Now, though, many banks want to keep people out of delinquency if at all possible. So, if you think you might miss a payment, let your bank know right away.

Another option to stop mortgage foreclosure is to sell your home through a short sale. This is a three way deal where all of the parties win. You find an investor who is willing to buy your home at a price that is less than what you owe. The bank agrees to waive the difference. The reason this plan tends to work for everyone is that the bank gets a non performing loan off of its books, the investor gets a good deal, and you get to walk away from your home. If you are pursuing a short sale, make sure that the bank has forgiven the deficiency so that you do not end up with a deficiency judgment against you.

The third option to stop mortgage foreclosure is to do a deed in lieu of foreclosure. A deed in lieu is similar to a short sale except it is just between you and the bank. The bank buys back your home and you walk away. The reason banks are sometimes willing to do this is because you guarantee that the property will be in good condition. Many foreclosed homes have been completely trashed, right down to having the copper pipes taken out and sold for scrap. So, a deed in lieu gives the bank a good deal as well. Again, you should make sure that the bank has wiped out the deficiency in such a deal so that you do not end up with a judgment against you.

There are solutions if you are looking to stop mortgage foreclosure.

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