Stopping Foreclosures

How to stop the foreclosure becomes a primary motivation for people who have managed to get behind on their mortgage obligations - for whatever reasons.

Until the notice of default - or the notice of trustee sale - is actually in your hand, sometimes it doesn't seem real.

Somehow the thought of somebody actually auctioning your house gets your full attention - where amidst all the late notices and threatening phone calls - the possiblilty of losing your house wasn't the most important thing prior to that notice.

More than likely, one of the following is true for you:

Most people in foreclosure are good people that get into bad sitations.

Early on in the process, stopping foreclosures is all about curing the default by bringing the loan current - getting the arrearages paid, some penalties and maybe some back taxes. But the longer this takes the worse the problem gets - like cancer.

After you have the notice of default or the notice of trustee sale, time seems to accelerate. Curing the default can become a monumental financial task after a certain point - the stress - the cash flow problems - bill collectors calling...

Let's go back and look at the chain of events and see what happened and what you could have done differently and - more importantly - what you can do from this point forward.

What are your options? How do you cure the default? What do you know about stopping foreclosures?

Ok. Let's start at the beginning - way back before you got a notice of default or the notice of trustee's sale.

In the early stages of the foreclosure process, the worst thing you can do is avoid the lender when you know you are going to have financial problems.

Think about it.

They get irritated when you don't communicate with them. If somebody owed you money and they stopped making payments and they would not return your calls, how would you feel?

With that said, the simple truth is that most people avoid the bank when they get into these situations.

Don't be like most people, call the lender.

Call your bank when you first get a late notice - or even better - as soon as you know that you are going to miss a payment. Tell them your situation and see what they are willing to do to help.

The earlier - the better - because the lender can't work with you if they don't know your situation.

Alternative courses of action for stopping foreclosures.

In general terms, you have several basic choices for stopping foreclosures. Other determining factors include:

These factors - or a combination - determine which choice might work best for you.

Here are some of the choices you have...

In today's market, there are many private investors and companies who specialize in short sale negotiations with lenders on behalf of the homeowner who is going into foreclosure.

It would probably be in your best interest to work with someone who has experience dealing with banks rather than trying to negotiate with the bank directly.

Again, this depends on who the lender is and how early in the foreclosure process you start negotiating with them. Generally, after the notice of default or the notice of trustee sale has been published, the bank does not want to deal with the homeowner. They want to deal with somebody who has the cash and who knows the ins and outs of stopping foreclosures.

At this point in the game, the trustee is the one handling the foreclosure and the internal account management is actually sent to a different office (or department) within the bank, usually called, "Loss mitigation or Defaults".

At this stage, you will be more successful interacting with the bank if someone who is well versed at stopping foreclosures handles the negotiations.

The main reason is that there are a series of procedures and a language involved in the short sale process that most people are just not familiar with.

Also, the bank does not want the homeowner to benefit at all if they are going to short sale - sell the house at a reduced price and write down the balance on the loan - the house.

Fannie Mae's website is an excellent resource for information about stopping foreclosures.

On February 20, 2002 Fannie Mae did a press release about it's program Home Saver Solutions, here's an excerpt:

Read more about Fannie Mae's Home Saver Solutions...

Information from the HUD website about stopping foreclosures...

An excerpt from the valuable information at the HUD Website includes the following:

Get a lot more information about foreclosure assistance at the HUD website.