Strategies to Stop Foreclosure
If you’re facing foreclosure, you might be able to stop the process by filing for bankruptcy, applying for a loan modification, filing a lawsuit, sell your house on the market with an agent or sell it to an investor for cash.
Did You Receive A Letter Like This?
to Learn How To Stop Foreclosure.
In foreclosure and want to learn how to stop foreclosure now? We have created some free online guides to help homeowners just like you find out your options on getting out of the sticky situation you’re in right now.
Lots of people before you have gone through foreclosure… & they won’t be the last. There is no shame. It happens.
The 1st priority to educate yourself on what is possible. Some people this will mean selling their home is the best option (we’ll make a fair all-cash offer on your house today, just let us know about your situation here <<), sometimes we’re able to help homeowners STOP FORECLOSURE completely, and sometimes there are other options. So, click one of the buttons above to get your free foreclosure guide.
This is the first step in getting back on the right foot financially and emotionally so you can regain control over your foreclosure situation. A foreclosure is not the end of the world and there are solutions where you can avoid or much more stop foreclosure.
Solutions from working with the bank (as this free guide goes over) or working with real estate solutions companies like ours that purchase houses at fair prices for all cash are all gone over in this FREE guide.
A free guide is yours below for you be able to put a stop or avoid foreclosure happening… including the one you requested. Download any of our educational guides 100% for free… and start communicating with us if you have any questions or want to see how we can help you sell your house fast.
GET THE GUIDE BELOW – just click the download image below.
Make tome today to go through this quick guide then create a plan of action.
If you need any help with it, then just give us a call or shoot us an email. We can discuss your options, look at where you are and what you can do, and in many cases, we can stop a foreclosing in 1-2 weeks.
If you’ve fallen behind on your mortgage payments and a foreclosure sale is looming in the very near future, you might still be able to save your home. You can potentially file bankruptcy, apply for a loan modification or other workout option, or file suit against the foreclosing party (the “bank”) to possibly stop the foreclosure entirely, or at least delay the process. (To get tips on what to do, and what not to do, when facing a foreclosure, see Foreclosure Do’s and Don’ts.)
File for Bankruptcy to Stop the Foreclosure
If the foreclosure sale is scheduled to occur in the next few days, you can halt the sale immediately by filing for bankruptcy.
The automatic stay will stop the foreclosure in its tracks. Once you file for bankruptcy, something called an “automatic stay” immediately goes into effect. The stay functions as an injunction prohibiting the bank from foreclosing on your home or otherwise trying to collect its debt. This means that any foreclosure activity must be halted during the bankruptcy process.
The bank may file a motion for relief from the stay. The bank might attempt to have the stay lifted by filing a motion seeking permission from the court to continue with the foreclosure. Even if the bankruptcy court grants this motion and allows the foreclosure to proceed, the foreclosure will be delayed at least a month or two. This should provide you with time to explore alternatives to foreclosure with your bank. (Read more about how bankruptcy can help with foreclosure.)
Chapter 13 Bankruptcy vs. Chapter 7 Bankruptcy
If you want to keep your home, a Chapter 13 bankruptcy might help you accomplish this goal. But if you’re simply trying to buy some time by stalling the foreclosure, a Chapter 7 bankruptcy might be right for you.
Benefits of a Chapter 13 bankruptcy. A Chapter 13 bankruptcy can help you keep your home by restructuring your debts. You will repay debts—some in part and some in full—over a period of three to five years as part of a repayment plan. You might be able to avoid foreclosure and remain in your home with this type of bankruptcy because you can repay any delinquent mortgage payments through the plan.
Also, you will likely pay a fraction (or sometimes, none) of your unsecured debts during the plan period and possibly eliminate certain other debts—like underwater second and third mortgages because they’re considered unsecured loans—entirely when you complete your plan, freeing up money for your first mortgage. Even if you can’t complete the plan, filing for Chapter 13 bankruptcy will give you at least several months before a foreclosure can be completed. (For more information, see Your Home in Chapter 13 Bankruptcy.)
Benefits of a Chapter 7 bankruptcy. If you’re already in foreclosure, filing Chapter 7 bankruptcy isn’t usually a good way to save your home, but it will delay the foreclosure proceedings and provide you with time to live in the home without making payments. You can put this money towards saving up for a rental. You can also use this time to try to work with the bank to come up with a way to avoid foreclosure. (Learn more in Your Home in Chapter 7 Bankruptcy.)
And, even if you still go through a foreclosure, the Chapter 7 bankruptcy will eliminate your personal liability for the mortgage debt, which means you won’t be liable for any deficiency remaining after the foreclosure.
Apply for a Loan Modification
While you don’t want to wait until the last minute with this option, you might be able to delay a foreclosure by applying for a loan modification, or another foreclosure avoidance option, because the bank could be restricted from dual tracking. Dual tracking is when the bank proceeds with the foreclosure while a loss mitigation application is pending.
Ultimately, if your modification application is approved, the foreclosure will be permanently stopped so long as you keep up with the modified payments.
State Laws in California, Colorado, Nevada, and Minnesota Prohibit Dual Tracking
California, Colorado, Nevada, and Minnesota have each passed a Homeowner Bill of Rights that prohibits the dual tracking of foreclosures. This means servicers generally must make a decision to grant or deny a (typically) first-lien loss mitigation application before starting or continuing the foreclosure process. You must submit your application by a certain deadline to get protection from foreclosure under these laws.
Federal Rules Restrict Dual Tracking
Under federal law, if a complete loss mitigation application is received more than 37 days before a foreclosure sale, the servicer may not move for a foreclosure judgment or order of sale, or conduct a foreclosure sale, until:
- the servicer informs the borrower that the borrower is not eligible for any loss mitigation option (and any appeal has been exhausted)
- the borrower rejects all loss mitigation offers, or
- the borrower fails to comply with the terms of a loss mitigation option such as a trial modification.
Be aware that the servicer generally doesn’t have to review more than one loss mitigation application from you. But if you bring the loan current after submitting an application, the servicer must consider it.
File a Lawsuit to Stop the Foreclosure
If your bank is using a nonjudicial process to foreclose—where the foreclosure is completed outside of the court system—then you might be able to delay or stop the foreclosure by filing a lawsuit against the bank to challenge the foreclosure. This tactic normally won’t work if the foreclosure is judicial because, by the time of a foreclosure sale, you’ve already had your opportunity to be heard in court.
To prevail in your lawsuit against your bank, you’ll need to prove to the satisfaction of the court that the foreclosure should not take place because, for example, the foreclosing bank:
- can’t prove it owns the promissory note
- didn’t act in compliance with state mediation requirements
- violated the state’s Homeowner Bill of Rights
- didn’t follow all of the required steps in the foreclosure process (as determined by state law), or
- made some other grievous errors.
The downside to suing your bank is that if you’re unable to prove your case, this will only delay the foreclosure process. Lawsuits can be expensive and, if you have no reasonable basis for your claims, you could get stuck paying the bank’s court costs and attorneys’ fees. (Learn more about Fighting Your Foreclosure in Court.)
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A Bit About Us And How We Can Help:
AZ Home Offer is a real estate solutions and investment company based here in Phoenix AZ. We love helping homeowners like you who are in tough situations find a win-win solution so you can get back on your feet and back to normal life. Our solutions range from helping you work with your lender to get your payments to where you can manage them again, we can buy your house for an all-cash fair offer in as little as 7 days, or several other solutions. In the end, we present you with all of your options… then sit back and let you choose what’s right for you.
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