Foreclosure

You have a few different options available to you when faced with a potential foreclosure.  Each situation is individual but the solutions usually fall under the following methods.

Injunction.

The State Court can issue an injuction halting the foreclosure if your can show by a preponderance of evidence that it is a wrongful foreclosure.  There are two main arguments which are used for this, factual and procedural.  In a factual argument you need to show the Court that the mortgage company is incorrect and you are in fact current on your mortgage payments.  This can be a daunting if not impossible task as it requires evidence of all payments often from the purchase of the property in question.

Forebearance.

A Forebearance Agreement is a repayment plan made directly with the mrotgage company.  Generally it will require a substantial amount of money up front and that the arrearage be reapyed over a six to twelve month period.  Be careful when negotiating with your mortgage compay for a Forebearance Agreement.  Often times the mortgage company will delay the approval of a Forebearance Agreement until the last minute, then, if you are denied, you are left without alternatives.

Loan Modification.

A loan modification is essentially a newmortgage onthe property with any arrearage being rolled into the new note.  This usually requires a substantial down payment, much like the Forebearance Agreement, but the repayment terms are usually more manageable.  If you do not have a substantial aount of equity or a healthy down payment it severely reduces the chance of your being approved for a loan modification.

Surrender.

You can choose to simply let the foreclosure proceed and give up the property in question, in essence doing nothing.  While certainly the simplest route in many situations this is highly discouraged as you will still be responsible for any defficiency created by the foreclosure sale.  Typically, there is a residual debt of anywhere from 15% to 35% after a property has been foreclosed on.  Essentially, you wll still owe money for a property you no longer own.

Bankruptcy.

A Chapter 13 Bankruptc will stop a foreclosure the moment the mortgage company and/or their attorneys are notified of the filing.  It will allow you to begin making your regular monthly mortgage payments again according to the origianl terms of the contract and allow you to cure the arrearge through the Chapter 13 Plan at a monthly amount conforming to your budget.  A Chapter 13 Bankruptcy eliminates the mortgage company's control of the situation allowing the homeowner's budget to dictate the terms.