How to prevent foreclosure

Facing foreclosure?

While each homeowner’s situation is different, there are ways to prevent foreclosure.

*If possible, avoid late payments. *Look into refinancing to lower the mortgage payment, provide a fixed interest rate and consolidate other debt.

*Contact your lender; explain the situation. The lender may suggest reinstatement (paying a lump sum to make mortgage current by certain date), forbearance (delay payments for short period of time), or a repayment plan. The lender may also agree to modify your mortgage to make payments smaller.

*Other solutions include selling the home. Lenders may agree to a short sale in which the lender accepts less than the full amount owed. The seller, however, may have to pay federal income tax on the money. A deed in lieu of foreclosure may also be an option, although uncommon with conventional loans. The lender allows homeowners to give back the property and forgives the debt. Again, there could be tax consequences.

Source: Foreclosure Avoidance Program sponsored by People’s Self-Help Housing Corp., Coast National Bank and Mariner Mortgage Inc.