How Can I Avoid Foreclosure on My Home?
Unless you own your home outright, you probably have a mortgage from a lender, which requires you to make payments on your home on time and in full every month. If you fall behind on these payments, your lender – typically a bank – has the right to repossess your home and foreclose on it.
For those struggling with debt and unable to make their mortgage payments, the risk of home foreclosure can be terrifying. If foreclosure is a threat, here are some ways that you may be able to avoid foreclosure on your home:
Modification or Refinancing of Your Loan
If you are unable to make your current monthly payment, you may be able to modify your current loan agreement or refinance. For example, the Home Affordable Modification Program (HAMP) allows you to modify your loan so that your mortgage payment is equal to 31 percent of your pre-tax income. According to the U.S. Department of Housing and Urban Development, a HAMP modification lowers the average mortgage by about 40 percent, making payments much more affordable.
Consider a Sale or Short Sale of Your Home
If you are unable to make your payments, the worst case scenario is that the bank forecloses on your home. One way that you may be able to avoid this – and in the best of cases, perhaps even make a profit – is to sell your house. In the event that your home is worth less than you owe, you should consider a short sale. Keep in mind that a short sale will negatively affect your credit, though.
Filing for Bankruptcy
You may be able to avoid, or at least delay, foreclosure on your home by filing for bankruptcy. This is because when you file for bankruptcy, you are granted an automatic stay, which means that creditors – including a home mortgage lender – must cease collection activity immediately. If you want to actually keep your home, rather than just delay the foreclosure process, you would need to file for Chapter 13 bankruptcy, which allows you to participate in a payment plan that works with your income to pay off arrears.
Work with a Michigan Foreclosure Attorney
In addition to the ideas above, other ways to defend a foreclosure action include unreasonable mortgage terms, active duty for a military member, and unfair lending practices. At the Van Den Heuvel Law Office, our experienced foreclosure attorneys can help you to explore all of your options to foreclosure defense, and will advocate for you every step of the way. We are highly skilled in negotiating with lenders and aiding clients through the process of filing for bankruptcy, and are knowledgeable in regards to all relevant laws and practices.
To schedule a consultation with our Michigan foreclosure lawyers today, contact us online or call us directly at 616-698-0000.