Many homeowners are faced with the troubling situation where foreclosure may be drawing near and, as a result, many homeowners have been using a variety of methods and foreclosure prevention efforts to either keep their home or surrender their mortgage deed without going through the foreclosure process. Foreclosure can be detrimental to someone’s credit score and since many homeowners are facing mortgage troubles across the nation it is becoming more of a problem.
However, there are foreclosure prevention efforts set in place by the Obama Administration who has prompted lenders to offer alternatives to foreclosure. Some homeowners may have attempted to obtain a mortgage modification or have seen a loss in their home’s value to the point that they can no longer afford their home loan payment, but in some cases a modification doesn’t help and homeowners with an underwater mortgage often want to be free of their home loan obligation.
Deed in lieu of foreclosure plans have been offered for some homeowners who simply cannot afford their home loan payments any longer. Again, mortgage modifications may not help every homeowner who obtains one, so as a result, homeowners have been able to turn over their deed and avoid facing the foreclosure process as lenders understand that financial and economic difficulties have simply put certain homeowners who were formally able to make their home loan payment in a position where they cannot afford their mortgage.
Short sale options have also been used by some homeowners who have seen a decrease in their home’s value. Homeowners have walked away from their home loan in some instances where an underwater mortgage was present, but short sale options are hoped to give homeowners the opportunity to escape an underwater mortgage without doing damage to their credit score.
There have also been reports that some homeowners have used bankruptcy to avoid foreclosure. While this is not a method that is highly advised for homeowners who want to keep their home, some homeowners have filed for bankruptcy which has either stopped the foreclosure process or put them in a position where they can get caught up on their debts owed and return to a financial position that allows them to remain in their home.
Some homeowners will be unable to avoid foreclosure, but with the exception of filing bankruptcy, many financial advisers are counseling homeowners who fear foreclosure to talk with their lender about modification programs, deed in lieu of foreclosure plan, and even short sell options so that they can either formulate a way to remain in their home or become free of their mortgage obligation without doing extensive damage to their credit score.