If you are like millions of other Americans, the foreclosure crisis is hitting close to home. In fact, it is hitting too close to home. While there are numerous reasons for the problem ranging from unscrupulous brokers, to irresponsible lenders, to naive would-be home buyers, you are still faced with the brutal reality that losing your home to the foreclosure process may, in fact, be more likely than not. However, before throwing in the proverbial towel and simply giving up, you may want to consider one of the many foreclosure alternatives. Three of the most popular are set forth below.
First, you can work with your lender in an effort to obtain a mortgage loan modification. This can take various forms including reducing and fixing the interest rate be charged on your loan, reducing the principal balance of the loan, extending the term of the mortgage loan, and even re-amortizing the mortgage loan. Whatever form the mortgage modification takes, this process is designed to make the monthly mortgage payments more affordable and prevent foreclosure.
Second, ask your lender if they would consider forbearing any delinquencies currently existing on your mortgage account. In a nutshell, this option requests a delay of any collection efforts by the lender to capture missed mortgage payments. The goal behind this foreclosure alternative is to give the borrower some breathing room to explore and consider his or her options and, in some cases, to regain their financial footing (i.e., where the borrower lost his or his job and needs time to find employment).
Finally, if you have considered your options and you are still at the end of your financial rope, you might want to consider the bankruptcy process. Designed as a method to give a “fresh start,” filing for protection under the United States or Hawaii bankruptcy laws is often the best method for homeowners overwhelmed by unsecured debt such as credit cards. Many times, eliminating this form of high cost debt provides enough breathing room to make the monthly mortgage payment affordable.