Stop Foreclosure | Save Home

By: Timothy McFarlin | Published: May 9th, 2012 | Category: Bankruptcy, Foreclosure Issues, Loan Modification

With foreclosures at all time highs throughout the county, many homeowners are asking how to stop foreclosure and save their home. There is so much questionable information circulating today about how to stop foreclosure and save homes, we thought it would be a good idea to put together a list of your most likely options to not only stop foreclosure, but also to save your home in the process.  Keep in mind, none of these options are guaranteed, but rather a list of possible options that may accomplish your goal to stop foreclosure and save your home.

Loan Modification to Stop Foreclosure

Loan Modification, or other workout options are often a very good way for homeowners to get a solution from their lender that will stop foreclosure and allow them to permanently keep their home. Loan modification to stop foreclosure is a voluntary arrangement the lender has to agree with and is typically based on the homeowners ability to make mortgage payments going forward. Specifically, their total household income is evaluated against the total cost of carrying the property (mortgage payment, property taxes, hoa, insurance, maintenance, etc.).  If the lender is convinced the homeowner has solved whatever financial problems caused them to fall behind, or can may a fair payment (even if it’s not a full payment), the lender will often be willing to stop foreclosure and allow the homeowner to save their home through a loan modification.

Stop Foreclosure with Bankruptcy

Another very common and reliable way to stop foreclosure and save your home, is bankruptcy. There are two types of bankruptcy that a homeowner can commonly file: chapter 7 and chapter 13 bankruptcy.

In chapter 7, all qualifying debts are discharged with no repayment plan and the foreclosure process is “stayed” during the case. This is guaranteed to stop foreclosure at least temporarily, and may stop foreclosure permanently if the homeowner (or their attorney) is able to work out a permanent loan modification or reaffirmation solution with the lender to stop foreclosure.

In chapter 13 bankruptcy, the homeowner (usually with the help of an attorney) puts together a repayment plan for creditors to repay debts over five years. Chapter 13 also stops foreclosure, but requires monthly payments to pay back not only the mortgage arrears (back payments that have accumulated), but also a portion of other debts such as credit cards, medical bills, etc.  Chapter 13 also requires the homeowner stay current on the mortgage payments after the case is filed in addition to the monthly payment for creditors.

Stop Foreclosure with Foreclosure Loans

Under certain circumstances, there may be lenders willing to offer homeowners foreclosure loans to stop foreclosure.  These loans are generally at very unfavorable terms to the homeowner, and require at least 50% equity in the property. At the point of foreclosure, the homeowners credit will probably have been damaged badly and you can expect a high interest rate.

California Bankruptcy and Foreclosure Attorneys

McFarlin LLP attorneys handle all aspects of bankruptcy and foreclosure representation for borrowers in Los Angeles, Long Beach, Beverly Hills, Santa Monica, Orange County and throughout California. Our attorneys are available to provide you with honest reliable advice at our Los Angeles or Orange County office or over the phone. With a matter as important as loan modification and foreclosure, it is a very good idea to consider hiring qualified loan modification lawyers to represent you and protect your interests. Call us today at (888) 728-0044.

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