Averting an FHA Loan Forclosure: 5 Emergency Tactics

Averting an FHA loan foreclosure may include a number of different activities. If you are behind on your payments, the first thing you should do is contact your mortgage lender, an honest discussion about your financial situation is the best method to begin to find solutions. Most mortgage lenders are willing to work with you to find that solution that keeps you in your home. Also, contacting the lender before the lender contacts you, demonstrates the desire to meet your obligation head on. This way you show the lender you want to take responsibility and are not going to run away. This will help convince the lender to try to help you out. If you need to offer a few incentives to get this help, then try the following:

Partnership in the Home

Sometimes if you have considerable equity in your home, offer the lender a piece of this in lieu of missed payments. The lender may cancel the missed payments and, depending upon the equity transfer negotiated, cancel additional payments as well giving you the opportunity to find some time to rise out of the financial difficulty that caused the missed payments in the first place. This method may work quite well during times where homes are appreciating in value at a rapid pace.

Additional Collateral

Often adding collateral to your existing FHA loan may help erase or suspend missed payments if the home loan balance is close to the appraised value of the property. If the lender agrees to added collateral– they may do so because the collateral will be lost along with the house if an eventual default takes place. You need to make sure you get a written agreement against foreclosure so the lender does not take advantage of you by initiating proceedings resulting in the loss of collateral as well as your home.

Consider Bankruptcy

Tell the lender you are considering bankruptcy if you cannot find a way to get back on track with your financial obligations. You may need to file for protection, but offer the lender a deed in lieu of foreclosure if they agree not to seek and other legal deficiency judgments against you.

Sell Your Home

It may finally come down to no other choice but sell your home to avoid foreclosure. Selling your home will at least allow you to maintain a credit rating that you would have plummeting if foreclosure procedures were but initiated. Yes, missed mortgage payments do affect your credit standing. However, selling your home and satisfying your mortgage obligations will be a positive mark on your credit rating.