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You have nothing to loose but the headache

Foreclosure is a serious and stressful issue that you could encounter. It happens when you fail to pay religiously the monthly amortizations. Of course, you never thought of this when you were still at the point of buying a house, didn’t you?

Well, buying a house would probably take a large part of your financial resources. Cash outflows start from the down payment and ends on the last monthly amortization which normally happens after five long years. However, there is no assurance that things would go perfectly well in five years and would get you behind on your monthly amortizations. Delays in payments would surely give you serious consequences. In fact, if the delinquency is too severe, you could end up losing your house through foreclosure.

Fortunately, before everything ends with a foreclosure, there are a few alternative remedies that you could take:

Pay the delinquency.

Paying the delinquency is the simplest solution to the problem to make your account current. All lending companies accept all the payments that were delinquent and eventually reinstate the loan. However, this would require you to shell out more. When you are in the foreclosure stage, legal fees are already incorporated. In addition, certified funds is also a requirement in order to reinstate the loan.

Forbearance and Repayment.

The most common way of resolving a mortgage delinquency is to request for a payment arrangement with your lending institution. The arrangement would usually allow you to pay a part of your delinquency every month on top of your regular monthly payments. However, if you are unable to meet the monthly mortgage payments, the lender can extend the forbearance by suspending payments for a certain period of time until you can start a new repayment schedule. 

Payment Assistance.

Fortunately, if you do not have funds to pay off the delinquency nor pay for the first few months of the payment arrangement, you can seek payment assistance from the state, local government or private charitable organizations. However, this may not be applicable to all because not all states and local governments offer such.


Another way to escape foreclosure is to request and apply for a re-amortization. In a re-amortization, the delinquent mortgage amount is added to the loan balance to bring mortgage payments current. This remedy increases not only the total loan amount but also the monthly payments. But the increase in payment will not be as high as before considering that the term is also extended.


Selling the property can also be done to allow you to settle your obligations and at the same time get any equity that you may have accumulated. In a private sale of the property, the amount received is usually greater than the amount of the existing loan. So, this probably can give you a good start in a brand new home.

Most of the alternatives mentioned earlier presume that you can settle the mortgage payments at some point which would eventually free you up from the burden. However, there is also another foreclosure alternative which is called a loss mitigation program. This program is established by the federal government and mortgage industry to stop foreclosures. Under this, you will be given options to assist you in keeping your house even if you do not have the financial capabilities to pay your monthly mortgage amortization.

So, if ever you will be facing a foreclosure issue, do not get dismayed and make your world stop because there are several ways to get through it.

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