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A look at some alternatives to going through foreclosure

Miami residents who own residential real estate may be interested in an article discussing some alternatives to going through foreclosure. These alternatives can help to avoid the loss of a home when the borrower is unable to make mortgage payments.

When a homeowner fails to make the required payments, a mortgage lender will often begin foreclosure proceedings. Foreclosure is the process where the lender takes over the home in order to resell it. Going through foreclosure can have a serious effect on a borrower's credit, so avoiding it may be a wise move. Luckily, there may be some options that can be negotiated with a lender as an alternative to foreclosure.

One possibility is to negotiate a special forbearance from the mortgage lender. This means that the lender could either suspend or reduce the borrower's payments and develop a payment plan with the borrower when there has been a loss of income or other issue. The lender may also be open to modifying the mortgage by changing the interest rate or the payment term of the loan. This allows the borrower to get a lower monthly payment and potentially catch up on any unpaid balance. The Federal Housing Authority may also be able to provide a payment that can bring the borrower's balance current through their insurance fund.

An attorney may be able to help a borrower who is behind on payments to understand the various alternatives to foreclosure. The attorney may also be useful in negotiating with the lender on the borrower's behalf. For those looking to buy a home, an attorney might be able to guide them through the process of real estate closings in order to avoid issues with the new home purchase.

Source: Findlaw, "Alternatives to Foreclosure", January 07, 2015

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