It is unfortunate that sometimes life does not turn out as we may want and some events lead us to get into a financial strain. When you are unable to pay your mortgage, you stand a chance of losing your home. Your lender files a Notice of Default when you miss more than 3 mortgage payments which when approved gives them a right to foreclose your home.
Unfortunately, most people give up at this stage and they think there is nothing more they can do about their situation. They end up losing their homes. The good news is that even after your lender has filed a Notice of Default (NOD), you still have a chance to stop the foreclosure process. There are a few strategies that you can use to stop the foreclosure of your home.
Negotiate with your lender
Most lenders are usually willing to work out a compromise with borrowers to allow them get back on track with their mortgage than take their homes in a foreclosure. At this point, you need to be honest with your lender about your current financial position and let them know that you are willing to work on a repayment plan. You can work out with your lender to extend your loan term but allow you to pay low mortgage rates in Quebec. Your lender will give you different options you can consider to help you keep your home in the long run.
After a foreclosure, the lender usually takes a home and puts it back to the market and tries to resell it. You can aggressively seek a buyer for your house before the whole foreclosure process comes to an end. Even after a lender has filed an NOD, you still have time until an auction is scheduled. You have an option of presenting your lender with a short sale offer. When you find a buyer, you can present them to your lender who then can willingly accept your offer since you have saved them time and effort of finding a qualified buyer. You should be ready with a pitch as to why your lender should accept your short sale.
File for bankruptcy
Filing for bankruptcy prohibits any debt collectors from conducting any collecting activities. This includes even your mortgage lenders. Lenders cannot proceed with foreclosure process when you file for bankruptcy since foreclosure is a collection activity. However, you need to consult with a good bankruptcy attorney to find out if filing for a bankruptcy is a wise strategy. What bankruptcy does is buy you time to work out your financial issues for some time but it does not let you off the hook. The law usually requires your lender to work with you in good faith to come up with a reasonable repayment plan before you get back on track. You need to be well informed on bankruptcy before going ahead with it since it also has its downsides.
Deed in lieu
Signing a deed in lieu means that you voluntarily sign your home back to the lender. As good as this may sound, you need to understand that signing a deed in lieu will have the same negative impact on your credit score as a foreclosure does. Most lenders are reluctant to accept a deed in lieu for a number of reasons. They accept it only when they are sure you are not faking a financial distress. They can tell this when your home has been on the market for several months and you have been unable to sell it prior to the foreclosure. It is not a guarantee that your lender may agree to a deed in lieu but it is worth a try.