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Ways to stop a home foreclosure

An impending foreclosure can be a very stressful time for any Florida homeowner. However, many legal options may be available to a homeowner if they want to prevent a foreclosure and keep their home. Ignoring the problem is the worst thing to do, and the creditor should be contacted right away. Any homeowner facing foreclosure should keep these basic strategies in mind.

The first thing to do is look for assets that might be liquidated in order to keep up with payments. It is better and easier to sell a car or take money out of savings than to have credit destroyed by foreclosure. Investment and retirement accounts might be another option, but these cash sources often have penalties and high taxes associated with early withdrawal.

There are a variety of workout options that can be explored with a creditor. The creditor is not legally required to work with the borrower, but it is often in their best interest. Loan modification is the most desirable option. This changes the terms of the loan, such as the interest rate or repayment schedule, to create a monthly payment the borrower can afford. Since missed payments are the most common reason for impending foreclosure, options that resolve the missed payments are important. Discussing forbearance, reinstatement and re-amortization with a lender as options for resolving missed payments may be beneficial for some homeowners.

An attorney may assist a client in understanding their options when facing a foreclosure. They might also work with creditors on a client's behalf in order to reach a workout option. Finally, an attorney may also spot any bank mistakes or errors that would cause the foreclosure to be dismissed.

Source: Realty Trac, "Stopping a home foreclosure ", December 09, 2014

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