Many homeowners looking for home foreclosure help dread dealing with the facts that got them into their situations in the first place. Looking back on their decisions to purchase homes, the thought that they might lose it was the furthest thing from their minds. Few Texas homeowners plan to go into foreclosure, yet in terms of foreclosure help Texas residents make up a large part of mortgage help center clients.
Reasons for Pending Foreclosure
Besides those who willfully commit mortgage fraud, never intending to make a single payment, most of those seeking mortgage foreclosure help are facing sudden, unexpected circumstances that stop them from making mortgage payments. The most common reasons for foreclosure help Texas residents have reported are:
- Unexpected unemployment
- Sudden illness
- Family death
- Excessive debt
- Job demotion
Regardless of the reasons cited, avoiding foreclosure is the goal of most seeking the foreclosure help Texas can offer.
How to Avoid Foreclosure
The number one way to avoid foreclosure is to prevent the filing of a Notice of Default. Lenders don’t necessarily want to foreclose, but will file a notice to protect their interests when necessary. If you know you can’t meet your mortgage obligation, call your lender, first. Your lender might propose the following options:
- Time to make up payments. A lender might agree to wait before taking legal action, allowing you to work out an affordable repayment plan. This strategy for foreclosure help Texas homeowners often choose is called forbearance.
- Payment forgiveness. This is very uncommon, but some lenders will agree on a way to make you current after missing a payment or two without paying it back. The lender essentially waives your obligation. This is called debt forgiveness.
- Repayment plan. This allows the homeowner to spread the missed payments out over a longer term. For example, the lender might let you add $100 a month to each payment for a year until you make up one missed $1200 payment.
- Note modification. Essentially, this is changing the terms of your loan. The lender might freeze your interest rate before it increases or change it to be more manageable.
- Refinancing. If you have sufficient equity and meet lending guidelines, the lender might increase your loan balance to include the back payments and re amortize the loan.
- Partial claim. Some government loans contain provisions that let borrowers who meet certain criteria apply for another loan that can pay back the missed payments.
If you’re unable to work out a schedule an cannot make the payments current, there are a few other options. You could choose to sell your home, consider a short sale, or sign a deed in lieu of foreclosure, returning the home to the lender. More can be found here.