Facing Foreclosure? 5 Alternatives to Simply Giving Up on your Home.

Foreclosure is happening each and every day in this country. It almost always has. But this time, its been at a record pace. If you are facing foreclosure here are some interesting alternatives.

1. Refinance - This may seem obvious but many of you probably don't think refinancing is an option for you. Truth is, rates have come down dramatically since you probably got your loan. If you can save a few points of interest and get out of an adjusting ARM loan, you might have a shot at saving your house.

2. Mortgage Relief - Your lender might be ready to offer relief if it becomes clear that you won't be able to make any more payments for awhile. Call up your mortgage servicer's office and tell them that you need more time to make your payments. They may offer you relief in the form of time so that you can get back on your feet. This is especially true if you are small busines owner and your income tends to fluctuate on a monthly basis.

Mortgage Relief extends the amount of time it will take the lender to foreclose on your property.


3. Not Foreclosure but Forbearance - Unlike mortgage relief, forbearance will give you the right to skip a payment entirely. Of course you will likely have to pay this somewhere, but for now, its skipped.

You still have to call your lender for this privilege.


4. Loan Modification - Loan modification is similar to a refinance in that the terms of your loan can be changed by the lender. Perhaps you have strong income and decent credit scores but are delinquent on payments. They may acknowlegde that by shifting the loan structure they will not only provide you terms you can meet, but that you can stick to.


5. Short Sale - I have seen a lot of these recently, especially in the suburbs. A short sale prevents foreclosure because you are able to sell a house at less than what you owe on it, which is usually the case when market prices are in decline. The lender will have final say as to what price they will allow on the sale. The good news is that if they approve the short sale, they will likely forgive the debt that is created by you selling it for less than what you owe. The bad news is likely a credit hit and a tax hit on the owed amount.

Eddie Patel