Alternatives to Foreclosure

Strategies for Preventing a Home Foreclosure

Have you received a notice of default? Have you been served with a notice of lis pendens from your bank? Are you merely struggling to stay current on your mortgage payments and are worried about the future? Whatever the case, it is vital that you take action as early as possible by contacting a Jacksonville foreclosure defense attorney. There are many effective strategies for keeping the bank's case from moving forward to a foreclosure, whether you are set on keeping the home or you would rather sell the property and put this experience behind you. According to a 2007 report to the U.S. Senate, the average home foreclosure costs the bank or other foreclosing entity a staggering $50,000. With this figure in mind, you can understand that banks will often be willing to consider alternatives to foreclosure.

Loan Modification

One of the simplest alternatives to foreclosure is referred to as a loan modification, and the result of such a modification is that you would end up paying less every month for your mortgage payment. A loan modification occurs when the bank agrees to reduce the interest rate or loan balance or to extend the period of the loan based on evidence that the borrower cannot keep up with the payments and is at risk of foreclosure or bankruptcy.

Deed in Lieu

Another approach is to contact the bank and request their consent to a deed in lieu of foreclosure. The transaction is fundamentally the same as a foreclosure – the bank receives title to the property in satisfaction of the loan balance – but it makes it unnecessary to carry out the complex and costly legal process. In a deed in lieu, you willingly surrender the deed to the property in exchange for being released from the obligation to continue paying on the mortgage.

Short Sale

If, like many homeowners across the country, you owe more on your mortgage than the home is worth on the real estate market, your mortgage can be said to be "underwater." Unless the housing market sees a miraculous resurgence, you cannot expect to gain equity in the property for many years, if ever, despite the fact that you are still making payments on a mortgage that was valued based on higher property values. If you sell the property, the bank will still be able to hold you liable to pay the remaining balance of the home loan. A solution to this conundrum is to negotiate with the lender for approval of a short sale, which would allow you to sell the property without being forced to pay the deficiency.

Bankruptcy

If foreclosure is only one of your problems with debt, it may be time for you to consider declaring bankruptcy. As soon as you file your petition with the bankruptcy court, you will be protected by an automatic stay against creditor actions, including foreclosure, wage garnishment, and repossession. The discharge of debt in bankruptcy will not include your mortgage, since it is a secured loan, but it will free up your income so that you are more able to afford the monthly payment. Should you choose Chapter 13 bankruptcy, you might even be able to include the mortgage payments you have missed into your three- or five-year repayment plan, thereby allowing you a considerable amount of time to cure the mortgage and to do so at a reduced rate.

Speak with a Jacksonville Foreclosure Defense Lawyer Today

As soon as possible after you have realized that you might be facing foreclosure, contact us at The Law Offices of Justin McMurray, P.A. for a consultation with a Jacksonville foreclosure defense attorney. We have more than a decade of experience and a track record that includes successes with almost every bank and lender in the field. Let us explore your options and represent you throughout the process of preventing foreclosure on your home.