Lately, the real estate market has cooled down from red hot in the last few years. The number of buyers decrease noticeably. Houses take longer to sell. Sellers reluctant to reduce price, that makes inventory goes up. In addition, the interest rate is creeping up slowly. The people have interest only loans or negative armortization loans are seeing their monthly mortgage increasing. To some people, the increase in mortgage takes a toll on their financial situation. Some home owners pay their mortgages late, some even can't pay anymore.

 When you skip monthly mortgage payment one or two times, lender will start the forclosure process.  If the net proceed from the forclosure auction is not enough to pay for the loan, lender still can goes after you for the unpaid portion.  When your house in forclosure, your credit rating will be negatively affected.  Therefore, you have to either stop or avoid the foreclosure.  Following are possible ways you can do to avoid forclosure.

1) For Sale: If the net proceed from selling the house is more than the loan amount, you can sale the house and pocket your net. 

2) Refinancing: You can also refinancing the mortgage to lower the interest rate and/or change the term or your mortgage. Depending on your credit scores and your equity, we might be able to find a way to reduce your monthly mortgage payment.

3) Special Forbearance: You can negotiate with your lenders to be able to reduce the monthly mortgage payment, or to skip a few payments. You will need to prove that you can pay your lender according to an agreeable terms between you and your lender.

4) Partial Claim: You can use the partial claim from the FHA to pay for the back payments. This will create a lien on your property, and you have to pay it off when you pay off your loan.

5) Reinstatement: You can stop the foreclosure process by paying your lender all the back pays and the fees associated with the foreclosure process.

6) Repayment Plan:  You can also negotiate with your lender a repayment plan. Ussually, it will be 1 and 1/2 month of the monthly payment untill you pay off all the back pay and fees.

7) Short Sale: If the net proceed from selling the house is less than the loan amount, you can negotiate with your lender to do a short sale. Contact us if you have to sell your house in a short sale.

8) Deed In Lieu of Foreclosure: In this process you give up the ownership of the house to the lender. 

9) Bankruptcy:  Bankruptcy will stop the forclosure, but it still won't help you keeping the house. 

Of course, you don't want your home to go into foreclosure.  Even the lender doesn't want to foreclose your home. You can choose one of the methods above to avoid foreclosure. If you don't know which option is most applicable to your situation, you can contact us at (408)838-3721.