If you are still early in the foreclosure, perhaps you just received notice from your lender that your home will be going to auction in a few months, then there is still time to possibly save it. Check out the following tips to see if any can help you in your situation.

  1. Sell the property: If you can find a buyer before the house is auctioned, you can sell it and keep whatever equity still exists.
  2. Work out a deal: Your lender may be willing to work with you, rather than lose money at a foreclosure sale.
  3. Refinance with a subprime lender: Your credit is poor right now because of the mortgage delinquencies. This means most or all of the traditional banks will not work with you. However, if there is equity in the property, you may be able to find a lender who will refinance you – at a higher-than-normal rate. These are called subprime loans, and they’re increasingly common: About 20 percent of mortgages today are subprime. You can even look up government sponsored lenders.
  4. File Chapter 7 bankruptcy: If you can’t get caught up in time, you will not be able to keep the house – but you’ll generally be able to delay the foreclosure sale a month or even several months. Any remaining debt to the lender will be wiped out.
  5. File Chapter 13 bankruptcy: If you can afford to make the future mortgage payments and the delinquent payments, too, file for a Chapter 13 bankruptcy. This is different than Chapter 7, in which assets are liquidated but debts are wiped clean. With Chapter 13, you keep your assets and, under court supervision, you repay your debts under a three-to-five year plan.
  6. Short sale/deed in lieu of foreclosure: A short sale takes place when the bank allows you to sell your property even though their mortgage won’t be paid. Be careful – the bank may allow the sale to go through, but only on the condition that you repay the deficiency. In a deed in lieu of foreclosure, the property is signed over to the bank in exchange for the bank giving up its rights against you. When might a bank agree to either of these? Lenders spend close to or more than $30,000 to foreclose on a property. Most lenders will consider these options to avoid foreclosure costs.
  7. Walk away from the house: Pack your things and leave. The only issue remaining is whether your lender can sue you for any deficiency still owed after the sale, and that depends on the state you live in and the type of mortgage you have. You’d be wise to speak to an attorney before taking this step.

Related posts:

  1. Foreclosure Is Not A Dirty World
  2. The Aftermath of Foreclosure
  3. Hitting It With Foreclosure Real Estate
  4. Foreclosure Errors
  5. Renting A Home That’s In Foreclosure