To stop foreclosure, which is a very credit and life devastating situation, borrowers need to consider all of their options. While making a full payment of what is owed in a lump sum is likely to be the only thing to quickly and effectively pull you out of foreclosure in the fastest way possible, this is often very difficult to make happen. It could be that you simply need some time to make payments on what you owe. For others, it’s not so easy. The fact is that you may find yourself struggling to make payments for the rest of the time that you own the home. Instead, it may be wiser to look at other solutions. One of them may be called a deed in lieu of foreclosure.
Working With Your Lender
In order to learn about your options, you do need to work with your lender to find out what they will and will not accept for your mortgage loan. Many are more than willing to work with you because they don’t want to own your home and have to go through the process of selling it. They want to work with you whenever possible. Sometimes, though, it’s important to realize that you simply can’t continue to hold the loan and that’s when your lender may offer additional solutions. One of them is a deed in lieu of foreclosure which is simply giving the deed to the property to the lender so that the debt is considered paid in full.
The only way for this to happen is to work closely with your lender. They will be able to tell you if this is a possibility or if not. In some cases, the lender may want you to try to sell the home yourself for a set amount of time before they will take the deed as the home’s loan repayment. This will allow them to skip over some of the costs that are associated with selling a home, which you would then have to pay.
Although a deed in lieu of foreclosure will effectively stop foreclosure from happening to you, it will still have a negative impact on your credit history. This is another reason why you will want to try to sell your home yourself, first. Nevertheless, when you can give back the deed to the home mortgage loan holder, it may be a better solution for your future.