Stop Home Foreclosure Dead in its Tracks

No homeowner plans to go into foreclosure. However, the current economy has put many people in the uncomfortable position of missed mortgage payments, and the housing market has made it difficult to sell a property for what is owed against it. If you find yourself in this position, what can you do to stop home foreclosure dead in its tracks?

First, contact your lender. Home foreclosure costs money, and many lenders will work with you to help bring your loan current. Some may agree to modify the terms of your loan. It is more cost effective for the lender to get the loan current than to proceed to foreclosure. This option is time sensitive: depending on the lender and mortgage insurer (FHA, VA, or private insurer), foreclosure proceedings are initiated after the loan becomes 60 to 90 days past due.

Second, if efforts to work with the lender are unsuccessful and home foreclosure seems imminent, you can stop foreclosure dead in its tracks by filing for a bankruptcy before the lender files a notice of default. A bankruptcy filing causes an automatic stay of foreclosure activity. The amount of time will vary with the type of bankruptcy filed, and it may not eliminate the possibility of foreclosure, but it will buy time, and that time might be enough to bring the loan current.

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