Foreclosure Prevention Measures In Sacramento and the rest of California

Foreclosure is a scary word. It’s the legal process through which a lender reclaims a borrower’s property after they have defaulted on their mortgage payments. In other words, it’s the stuff of nightmares. But foreclosure doesn’t just happen to other people; it can happen to anyone who isn’t able to keep up with their mortgage payments. If you’re behind on your payments and struggling to catch up, don’t despair—there are steps you can take to avoid foreclosure and keep your home.

Loan Modification

One option for avoiding foreclosure is loan modification. This is when a borrower and lender agree to change the terms of the original loan agreement in order to make the payments more affordable. This could mean extending the length of the loan, reducing the interest rate, or changing the type of loan from an adjustable-rate mortgage to a fixed-rate mortgage. Loan modification can be an effective way to avoid foreclosure, but it’s not always easy to qualify for. You’ll need to show that you have a genuine financial hardship and that you’re unable to make your current payments.

Reinstatement

Another option for avoiding foreclosure is known as “reinstatement.” This is when a borrower catches up on all of the past-due payments they owe, plus any fees and interest that have accrued. Once they’ve caught up, they can begin making their regular monthly payments again. Reinstatement can be difficult to achieve if you’re facing significant financial hardship, but it’s worth exploring if you think you might be able to catch up on your payments.

Short Sale or Deed in Lieu of Foreclosure

If you’re unable to catch up on your mortgage payments and you don’t qualify for loan modification, your last resort may be a short sale or deed in lieu of foreclosure. These are both options for homeowners who are willing to sell their homes for less than what they owe on their mortgages. With a short sale, the proceeds from the sale go towards paying off the outstanding balance on the mortgage. With a deed in lieu of foreclosure, the homeowner simply hands over ownership of the property to the lender—this is often seen as preferable since it avoids having a foreclosure on your credit history.

Foreclosure is a scary prospect, but it doesn’t have to be inevitable. If you’re struggling to make your mortgage payments, there are steps you can take to avoid losing your home. Talk to your lender about loan modification or explore other options like reinstatement, short sale, or deed in lieu of foreclosure. Whatever you do, don’t wait until it’s too late—take action now and put yourself on the path to keeping your home.