Are you at risk of foreclosure? Are you in the pre foreclosure stage?
Are you months behind in your mortgage payments? If you or anyone you know, answer yes to these questions, this article is for you or for them.

The last few years have been rough on homeowners, and many are at risk of losing their homes, their American dream, and the opportunity to build generational wealth. Often this can be prevented if homeowners are aware of the number of options available to them.

 So, what can homeowners do when their house is at risk of being foreclosed? The good news is that all is not lost. If the lender has not taken any legal action against you, and you can still reverse the process.

1. Pay arrears, become current on the loan - The easiest way to avoid foreclosure is to pay off any missed payments, including interests and late fees. This option may be right for you if paying your mortgage is a temporary problem. This is called reinstatement.

2. Work out a period of loan forbearance - Loan forbearance means that the lender agrees to temporarily reduce or suspend monthly payments for a time period, like six months. At the end of the forbearance period, your regular mortgage payments start again, and the missed payments are added on. This is good if you just need short-term relief.

3. Loan modification - If you are struggling to make your monthly payments but want to keep your home, you may be able to work out with your lender to renegotiate your loan terms to lower your monthly payments. This might be a lower interest rate or an extended-term. If you are going through a rough patch with an end in sight, your lender may be willing to delay some payments without a penalty fee.

4. Refinance with another lender - Another lender may agree to refinance your mortgage. There are also some federal government refinancing options at Making Home Affordable, https://www.makinghomeaffordable.gov/

If none of these options are possible for you, there are still ways to avoid foreclosure and save your credit allowing you to buy another house in the near future.

1. Negotiate a deed in lieu of foreclosure

You may want to cut your losses and walk away from the house entirely. If your mortgage allows, you may be able to avoid foreclosure by handing over the deed and any claim you have on the property to your lending establishment. In exchange, your lender releases you from your mortgage obligations. Sometimes, the lender may also offer a cash sum. It will allow you to start a new life.

2. Sell your house during the pre-foreclosure process

You are allowed to sell your house at any time while you are in the pre-foreclosure or foreclosure process.

a) Regular Sale - If there is equity in your house, you can sell your house in a regular sale. It is best to price the property slightly below market value to attract buyers, sell fast and reduce penalties.  The proceeds from the sale will be enough to pay off your debt to the bank and allow you to walk away with funds.

b) Short Sale - If you owe more than the house is worth, the bank may allow for a short sale. In this situation, the bank takes the money from the sale, but forgives the outstanding balance, allowing you to walk out debt-free and your credit intact.

If you do decide to sell your house, it is wise to hire a reputable and experienced Realtor to help you, as selling a house is one of the most complex transactions there is. Feel free to contact me if you have any real estate questions or need help with selling real estate.