7 Ways You Can Avoid Foreclosure

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Foreclosure can be a scary thing for anyone to face. However, unexpected financial burdens can happen to any homeowner, and foreclosure may seem like an inevitable next step when you can’t afford your mortgage payments.

Consider these things before you give in and give up your home:

Know Your Rights

mortgage paymentMost importantly, you need to know your rights when it comes to foreclosure. Many homeowners might feel as though their hands are tied if their lender threatens foreclosure for being months behind on their mortgage payment. But, as a homeowner, you still have rights even when you haven’t paid.

Grab your mortgage documents that you signed when you closed on your loan. Look at all the fine details to understand what the lender is allowed to do when you fall behind on payments. How much time do you have before foreclosure might happen?

Don’t let a lender bully you into making payments, especially if you still have some time before foreclosure is an option. Be prepared by reading your documents thoroughly before anyone contacts you.

Compromise with Your Lender

Owning a home is expensive, from paying your mortgage – to purchasing home insurance. Lenders know that, and they also know that some people have unexpected things pop up that can make it even more difficult for them to afford house-related costs. You might be surprised to know that your lender may be more than willing to work with you rather than go through the hassle of starting the foreclosure process.

Call your lender, explain your situation, and offer a deal to make a payment for as much as you can handle until you get back on your feet. Be prepared to compromise, because the lender deserves a fair deal too.

Contact the Making Home Affordable Program

Home Affordable Program

The Making Home Affordable (MHA) Program is in place for people like you who need some help affording their home. The program can offer help to you in the form of a counselor who can offer advice to avoid foreclosure – and give you financial assistance to help you afford your payments temporarily.

If you have a FHA loan, you should call the contact number to discuss your options for receiving help.

Deed in Lieu

A deed in lieu is another option you have to avoid foreclosure, but it won’t offer you much benefit over a foreclosure. If you opt for a deed in lieu, you’ll voluntarily hand over your house to the lender, rather than the lender foreclosing on your house. Unfortunately, they’ll both ding your credit. It’s also difficult to get approved for this instead of going through with a foreclosure.

However, this method could be a good option for you if you have had your home on the market for a while but still haven’t had a buyer, or if the lender can gain some profit from agreeing to the deed in lieu.

Sell Your Property

Sell Your Property

When you bought your first home with your spouse, you probably didn’t expect marriage trouble or divorce. But, divorce happens sometimes and you should protect yourself in the event that it does.

If a divorce is the reason you’re facing foreclosure, then it’s important to know that you have options. If neither one of you want, or can afford to keep the home, then you should discuss the possibility of selling with your lawyer. He or she can guide you in the right direction during the divorce process to ensure that the sale of the property gets divided fairly between you and your spouse. You should read more on how to sell a divorce property before you go any further.


One of the last things you’d want to do in lieu of a foreclosure is to file for bankruptcy. Still, it’s an alternative if you’ve exhausted your other options. Once you file for bankruptcy, if can prevent a foreclosure from going any further. The court will grant you what’s known as an automatic stay, which forces any debt collector – including your mortgage lender – to stop attempting to collect debt from you.

This can, at the very least, give you a bit more time to get your finances in order and figure out the best route to go. Most bankruptcies will take between three and four months to finalize, and your foreclosure can’t continue until the process is finished.

Avoid Foreclosure Scams

Lastly, you should be careful to watch for any foreclosure scams that seem like they’re offering help to you when you’re facing foreclosure. You might get phone calls, mail offers, emails, or flyers from scammers promising that they can help you avoid foreclosure and pay your bills.

If an offer sounds too good to be true, it probably is. Most of the time, you’ll wind up paying money you can’t afford for “help,” causing you to fall further behind on your mortgage payments and move closer to the reality of foreclosure.

Speak about your foreclosure only to your lender or a government assistance agency rather than third parties who are out to scam you.

Do Your Homework

Facing a foreclosure can be scary, and it’s something no one wants to go through. Be sure you’re doing your homework and reading up on everything you can that can benefit your situation. You may think there is nothing or no one out there that can help you – but you’re wrong. Consider all of these tips before you lose your home. In a few months, you’ll be thankful you didn’t give up.

A post by Pankaj Sharma (3 Posts)

Pankaj Sharma is author at LeraBlog. The author's views are entirely his/her own and may not reflect the views and opinions of LeraBlog staff.


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