Distressed Mortgage Guide - Stop Foreclosure Before It Happens

Reading up on how to stop foreclosure after being foreclosed or when it's about to happen is not a good idea. It still is possible to save your property, but the chances get slimmer with each passing day. For those unable to meet mortgage payments, the best period to act is a long, long time before that.

The foreclosure is a result of a drawn-out process that involves several stages, each of which offers the borrower an opportunity to settle the matter. The dispute becomes legal only when a series of letters and notices go unanswered. For the lender, the foreclosure is a loss and a messy affair, which is why the lender is always open to a negotiated settlement.

When the mortgage payments on a loan stop coming in, the lender usually sends a reminder or two. If these letters are ignored, the lender has the right to bring in the legal team. The lender's lawyer then sends a legal notice, which warns the borrower to clear the pending amount within a set period - usually one week or a fortnight.

This is the last possible opportunity for the borrower to find an amicable and negotiated solution. The aim is to get the lender to give more time, forgive a certain amount of the loan and refinance the remaining balance with an easy repayment schedule. Those who feel intimidated or unsure about how to go about this should get in touch with a mortgage assistance consultant or a consumer debt advocacy.

After this stage, if still unresolved, the matter goes to court. Once this happens, the chance to make a deal directly with the lender is less easy, since legal costs have to paid, and the matter has to be settled to the satisfaction of the court. After the lender gets the court's permission to foreclose on the property, there isn't much room left to save the house.

There is, however, one opportunity to extract some of the investment that the borrower has shelled out todate. Get in touch with a distressed mortgage property consultant. The aim here is to find a quick buyer for the property - someone who will clear all pending financial and legal matters with the lender, and pay the home owner a bit of cash.

To sum it up, when the notices start arriving in the mail, it's time to start figuring out a way to pay the lender, ask for more time or find help to negotiate refinancing. Ignoring the notices won't make the problem go away, and will only make it worse. If there is no other way to stop foreclosure, then disposing the house is a better alternative to clear all the debt and get back some of the money already paid into the mortgage.