It can happen to a lot of people. Financial issues sprout up, you fall behind on your mortgage payments, and all of a sudden you’re in foreclosure on your house or property. It can often feel as though that once that process starts it’s impossible to stop it. And lenders can be very aggressive and act tough during the process in an attempt to make sure you don’t feel capable of finding better options.
But there are absolutely ways you can stop foreclosure proceedings and keep your house. Whether you file for bankruptcy, apply for a loan modification, use the legal system, or sell your house for cash to a real estate investor, it’s possible to delay or even stop foreclosure with just days to go. Here are 5 tips on how to stop foreclosure at the last minute.
**We are not attorneys and we are not giving legal advice. Consult with legal counsel before making any decisions.**
Options To Stop Foreclosure At The Last Minute
File for Bankruptcy
If the clock is ticking and you want to stop it no matter what before the lender forecloses on your house, you can declare bankruptcy. Doing so automatically stops a foreclosure right where it is, regardless of timing, thanks to an automatic stay that goes into effect. This prohibits a lender from collecting on any debt while the bankruptcy process plays out.
It is possible that the lender can file a motion for relief during the stay. The court may or may not grant this, but even if they do, that will delay the foreclosure for at least a month or two, giving you some extra time to figure your situation out. This also gives you more time to explore your options to foreclosure, including selling your house to a real estate investor.
Of course, there are drawbacks to bankruptcy that you’ll need to consider. Your credit is going to take a massive hit, making it very hard to get loans or credit. It also means you won’t be able to file bankruptcy again for a long time and opens the door to creditors attempting different collection actions, including wage garnishment.
You should also know the difference between Chapter 13 bankruptcy and Chapter 7 bankruptcy. If you want to try to keep your house, you’re going to want to pursue Chapter 13 bankruptcy. If it’s more about just trying to buy some time and you’re not looking to keep the house, a Chapter 7 bankruptcy would probably make more sense.
Apply for a Loan Modification
This option is better suited for when they’re a little more time but if time is running out and you haven’t already tried it you should apply for a loan modification or similar foreclosure avoidance process.
It could delay the foreclosure because lenders are often restricted from pursuing foreclosure while a loss-mitigation application is currently pending (often known as dual tracking). Plus, if your modification is approved, the foreclosure process will end and you’ll be able to start fresh with a new payment plan. Of course, if you don’t make those payments the foreclosure process could start up soon again.
File a Lawsuit Against Your Lender
If the lender is attempting to foreclose on your property using a nonjudicial process, you might be able to stop the proceedings by filing a lawsuit against them in court. If the foreclosure is already judicial, this tactic usually won’t work because you will have already been heard in court before now.
What you will have to do to delay or stop the foreclosure is to prove that the lender should not be able to move forward because of any number of circumstances. They include not acting according to state mediation requirements, not being able to prove it owns the promissory note, violating the Homeowner Bill of Rights in your state, not following the requirements needed in the foreclosure process, or making some other kind of major error.
Before filing a lawsuit, consider that it’s possible you won’t win, and all you will have accomplished is a slight delay and more money out of your pockets to pay legal fees. Plus, if your case is considered frivolous, you could end up on the hook for court fees and lender attorney fees.
Contact an Attorney
If you’re intent on delaying the foreclosure, it can’t hurt to reach out to a local attorney who deals in these kinds of situations for a no-fee consultation. Look specifically for an attorney who specializes in foreclosure or bankruptcy. They will be able to provide you with time-tested possibilities for getting the foreclosure pushed back or canceled.
Along with an attorney, you might also want to speak with a HUD-approved housing counselor, who can provide you with the information and assistance you need to avoid foreclosure.
Sell Your House As-Is
If the clock is ticking and you find yourself out of options on how to avoid foreclosure, one thing you can do is sell your house or property as-is to a real estate investor like Nexus Homebuyers. Even though foreclosure is imminent, so long as the bank doesn’t own the house yet, they can make you a cash offer and take it off your hands. You don’t need to do anything to the property or worry about the financial situation. If you accept the offer they will buy the house from you quickly and let you walk away without having to deal with the foreclosure any further.
If you find yourself dealing with a foreclosure and time is running out, consider giving Nexus Homebuyers a call to find out what they can do to help you out.