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The Most Common Foreclosure Choices

Following are the most common selections for people facing foreclosure. Depending on your situation, all of these options may well, or may not, be available to you. Everyone's individual situation is different.

1. Reinstate the Loan.
2. Forbearance
3. Mortgage refinancing
4. Loan Modification
5. Sale of the Property
6. Bankruptcy Filing
7. Deed in Lieu of Foreclosures
8. Nothing

1. Reinstate the Loan. The most obvious option is always to pay the loan current. If foreclosure proceedings have recently been filed, then the amount needed to get loan current wouldn't simply include back payments, but also late charges as well as possible attorney fees. This is the quickest as well as the most efficient way of closing a foreclosure action. Negotiate with the lender if you're able to do this. Sometimes they will take a little smaller amount, 90%, 80%, even as low as 75%. Call them and say something similar to, I've borrowed X amount of dollars from my relatives, will you take that and forgive the rest? Don't tell them it can be your money. Make it is always someone else's money. They are going to end up being less sensitive to you for those who have lots of money and haven't been making payments. Get the discount in writing before you send the money, an email or fax can work.

2. Forbearance The lender stops or postpones lawful action. Usually granted when you make satisfactory arrangements to make the overdue mortgage payments present.

3. Mortgage refinancing Mortgage refinancing seeks to avoid foreclosure by visiting a new lender and finding a new loan. But in most cases, once foreclosure has started, you have been through a few months of late payments or absolutely no payments. These late payments have a devastating impact on your credit rating. In addition, the new mortgage company will easily find out about the current foreclosure action. This most often leads to denial with the refinance loan application. If you are approved it is possible to bet it will have a VERY high interest rate with more than normal closing costs etc.

This option is normally just for those with excellent credit histories and who've only suffered a temporary problem. Remember that time is of the essence, so don't waste a lots of valuable time on this alternative. You could lose your house while waiting on loan authorization.

4. Loan Modification A loan modification seeks to prevent foreclosure by negotiating with the lending company to modify the terms with the loan. Loan modifications may include adjusting he interest rate, extending the loan period or perhaps adding the delinquent portion and fees back onto the principal of the loan to be repaid with time.

5. Sale of the Property If you have been unable to work or do business with your lender or find another suitable solution in a timely manner, it is time you should think about selling.

Selling it through the traditional method, of listing it with a realtor on the MLS listing is actually one solution. But this method can take from 4 to 6 months. Make sure you get a reputable realtor. One who will work to market the house and list it at a price it will sell for. Some realtor's over exaggerate the particular house's value and the selling price to find the listing and then the house doesn't sell and you also are foreclosed on, losing everything. Do a short contract. One month at a time. Tell the realtor you will renew it on a monthly basis if they are good and are working hard to sell the home. If they are not willing to provide you with a monthly contract or a contract that allows you to cancel any time, then find another realtor. Time is of the essence and if the realtor is not willing to become a help in your situation, find a realtor who will be.

Another avenue to consider is selling your property to an investor who presents "a quick closing". Remember time is of the essence. Typically, this will be for under fair market value, but can be a benefit to you because it's a quick "as is" sale without any real estate commissions. "As is" means you wouldn't have to spend any cash doing repairs, or spending time putting the home in perfect condition. By selling your house "as is" to a investor, you get a quick sale, enabling you to instantly stop the foreclosure as well as salvage your credit. In the Kansas City metro area BLu Horizons Real Estate Solutions provides a quick closing, as is sale. We can close in seven days or less, if we have to. Sell house fast

6. Bankruptcy Filing Some homeowners act on their own lawyer's advice and file bankruptcy thinking that all their problems are right now solved. Bankruptcy does put a hold on everything. But all it buys you is some time. The end result is, almost always the property still goes to auction and you now will have a bankruptcy, in addition to the foreclosure on your own credit report.

7. Deed in Lieu of Foreclosures This is when you can voluntary deed title in your property to the lender. You are basically giving your house back to the bank. The ordinary effect of the taking of a Deed in Lieu, is to extinguish the lender's deed of trust plus it vests the lender with title susceptible to all other existing liens as well as encumbrances. In effect, the lender becomes the fresh owner. The lender is not necessary forced to accept the Deed in Lieu and could show their refusal by submitting a Notice of Non Acceptance using the County Recorder.

8. Nothing You may find this odd that nothing is listed as an option; however one of the most typical options taken by homeowners will be Nothing. Don't fall into the trap of convinced that everything will magically work itself out, because it will not.

We trust that the overview of foreclosure options will allow you to start down the path of informed decision making to safeguard yourself, your family, your home and your banking account.

Although the most common options are covered on this report, there may be other options accessible to you, depending on your particular circumstance.

This is not legal advice or assistance! The application of law varies from state to state and an individual's specific circumstances can vary greatly. Consult a lawyer if you need and you want professional advice.

This information was provided by BLu Horizons Real Estate Solutions at blu-res.com