Distressed Mortgage Advice - Stop Foreclosure Before It Happens Flopping around like a headless chicken trying to stop foreclosure at the last minute isn't going to be of much help.
On paper, the property can still be saved, but in reality, it's well nigh impossible.
For those stuck with a trouble mortgage, the time to act decisively is at least a few months 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.
At first, when a borrower stops making payments on a mortgage, the lender sends a couple of notices.
Left unanswered, the lender has no choice except to send a legal notice via a lawyer.
This legal notice gives the borrower at a week or two to clear all pending dues.
This is a very critical turning point.
The house is in no real danger before this, and it is in real danger after the notice period.
A distressed home owner should consider this a final opportunity to appeal to the lender for more time, or a refinancing deal.
It is also a good idea to bring in a mortgage help consultant or a consumer advocate to help convince the lender.
After the notice period expires, the court will come into the picture.
Now legal costs have to paid, and the lender will be less open to a settlement.
Any settlement made will also have to be approved by the court, unless the lender withdraws his foreclosure filing.
Once the lender gets permission for a foreclosure, the wriggle room is even smaller.
At this stage, the property will almost certainly slip out of the owner's hands, but it is still possible to save at least a part of the money that has already been paid to the lender.
A distressed mortgage property has many takers, including companies that specialize in buying such properties and settling all claims made by the lender.
The home owner gets to walk away from the legal mess with some cold, hard cash in hand - a situation that is a lot better than foreclosure.
To summarize, when the lender sends a notice, respond to it, be in touch with the lender and delay as much as possible while looking for a solution.
The only real solution to save a house and stop foreclosure is to live up to commitments being made.
If the situation is beyond repair, then the least that can be done is to sell the property and salvage whatever possible before it goes into foreclosure.