While the housing market is rebounding, many people in Texas are still struggling to make their mortgage payments. How to avoid foreclosure in Texas suddenly becomes a hot topic.
If you’re underwater on your home or having trouble keeping up with your monthly payments, you might be fearful that your mortgage lender may foreclose on you.
Thankfully, there are a number of things that you can do to avoid foreclosure across various areas of Texas. It’s important to remember that moving quickly is absolutely paramount, and could save your credit rating and house.
So let’s dive in on a couple of quick tips on how to avoid foreclosure in Texas with your house.
First, What Is The Biggest Cause Of Foreclosure?
While there are many factors that can contribute to the foreclosure of real estate some of those most common causes usually arise from unforeseen circumstances. If you are not prepared, even if you think foreclosure can never happen to you, you may find that a couple of missed payments can land you in the hot seat and your lender hounding you to pay them. The following are the biggest causes of foreclosure:
Death
A death in the immediate family, particularly that of the primary breadwinner can cause financial turmoil for the remaining spouse. While this situation is already emotionally and mentally draining adding financial stress can easily having the surviving spouse facing foreclosure if they are not prepared.
Medical Illness and Expenses
When a medical illness or sudden medical emergency becomes too difficult to manage, causing loss of pay due to sickness, it is easy to fall behind on a mortgage payment or two. A couple of missed monthly mortgage payments can easily get away from homeowners and by the time they know it they can find themselves in a pre-foreclosure situation.
Unemployment
Sudden job loss can be a huge contributing factor to the rise of houses going into foreclosure. If you don’t have savings to keep you afloat during this time, you may find it difficult to keep your mortgage loan current.
Divorce
It’s not uncommon for a married couple to share the financial burden of making timely mortgage payments on their home. However, when a relationship comes to an end, the question of who will keep the house and continue making payments will soon arise. Oftentimes, the individual who is left to take on the responsibility of keeping the loan current will find themselves struggling to make ends meet.
Sudden Relocation
If you have a job that may require you to relocate at a moment’s notice, you may be in for a surprise if you are not prepared to handle the financial tightrope that is to come. When relocation happens suddenly, you may not have time to sell your current property, leaving you to make a mortgage payment on two houses. Once these payments become too much to bear, foreclosure begins to appear in your line of sight.
No matter what has left you facing foreclosure it’s important to understand that you have options that may help you keep your Texas house. Do not hesitate to speak with your lender and seek legal advice to determine how much time you have left on the clock.
Then make a plan to either pay off the debt or sell the house to prevent the foreclosure from impacting your credit and ability to purchase a house in the future.
Can You Stop A Foreclosure Once It Starts?
Once in foreclosure, many people simply give up and walk away from their homes. There are even areas of Texas that have begun to resemble ghost towns, as the economy has impacted residents significantly.
Detroit is a prime example of what can happen when people abandon their homes.
This can be a stressful situation, but it’s extremely important to keep your wits about yourself. A foreclosure will have a huge negative impact on your credit score, and likely prevent you from purchasing a home for years to come. If you sell your home, you could leave a portion of the loan unpaid, and the lender could pursue legal action against you for the unpaid portion.
While facing foreclosure may seem like the end of the world to some, there are ways to stop foreclosure once it starts. Don’t lose all hope because there may be a foreclosure prevention option that works for you. Read on to find out more about the best way to prevent foreclosure.
What Is The Best Way To Avoid Foreclosure?
When it comes to avoiding foreclosure, there is no one size fits all approach. Some solutions or resources might be better suited for some homeowners but not all.
Reinstate Your Loan
If you have the means to do so, you should try to reinstate or bring your loan current. This is a clear-cut foreclosure prevention method. You can contact your lender to inform them you have the funds available to catch up on your past-due mortgage payments plus any fees that have been incurred. Your lender will allow you to catch up on your missed payments because it is less financial burden than moving forward with the foreclosure process. Unfortunately, for most people, this isn’t always the most viable option to stop foreclosure.
Apply For a Loan Modification
You will need to contact your lender about this option, but there may be a chance you can qualify for a loan modification. This is where your lender will work with you to change the current terms of your loan to terms that are more suited to your financial situation. In order to qualify for this foreclosure avoidance option, you must apply as soon as possible.
File For Bankruptcy
If foreclosure prevention is what you are looking for then filing for bankruptcy may help you achieve that. Filing for bankruptcy will allow you to stop the process immediately. Even if your house is set to be on the auction block tomorrow. This will give you time to explore other options that can prevent your lender from foreclosing on your property.
Loss Mitigation Options Through Your Lender
Banks and other financial institutions are well aware that citizens of Houston are struggling. Loss mitigation is a way for your lender to work with you in an attempt to find mortgage relief. Aside from the options listed above, there are more solutions your lender may provide.
Forbearance Of Your Loan
Your lender can essentially put your mortgage payment on hold for a certain period of time. You will still be responsible for the repayment of the default loan balance, however, it is often deferred until the end of your mortgage or paid back under a repayment plan or loan modification.
Deed In Lieu Of Foreclosure
When you opt for a deed in lieu of foreclosure, you will not keep your house. You will voluntarily be handing over the title to your property back to your mortgage company. This will not be the best option for those with hopes of keeping their house. When all else fails and correcting the default of your mortgage loan is no longer an option, this may prevent your credit score from dropping as much as it would.
Short Sale
When a lender allows you to sell your house for less than what you owe, this is known as a short sale. For a lender, this can be a better option than going through the foreclosure process. Believe it or not, lenders want to prevent foreclosure due to the financial headache it can cause, so persuading them to allow a short sale might be a better fit for all parties. When going through a short sale process not only can you halt foreclosure but can also save your credit score as well.
Ask Uncle Sam To Help With Your Mortgage Payments
Over the last five years, the federal government has implemented a number of programs to help struggling homeowners stop foreclosure. The Home Affordable Modification Program (HAMP) allows struggling homeowners to modify their loans, reducing monthly payments. The Home Affordable Refinance Program allows homeowners who are current on their mortgage payments to refinance an adjustable-rate mortgage into a low-interest, fixed-rate loan.
Both of these programs are subject to eligibility requirements. You can also seek other resources from the U.S Housing and Urban Development or (HUD) website, such as speaking with a HUD approved housing counselor. If approved for one of these government-provided options, you may be able to save your home and prevent yourself from being added to the rising list of foreclosures across the country.
Sell Your Home To Avoid Foreclosure
When all other options for keeping your home fail, you may be able to sell your home and satisfy the amount you owe your lender. You may be able to accomplish this through the help of a real estate agent if you do not want to take on the task of selling your house for sale by owner. Keep in mind that selling your house on the traditional real estate market can take time, so tread carefully here. If you want to avoid foreclosure in Texas you have to be mindful of your time.
Contact Us To Avoid Foreclosure
We understand that the possibility of losing your home can be stressful. You aren’t alone. Citizens all over Houston are going through the same troubles. Foreclosure can have a lasting effect on your financial life, and it’s important to move quickly and take advantage of any options available. You could save both your credit rating and remain in your home.
We may be able to help you avoid foreclosure in Texas… call us today and let’s discuss your situation. We don’t charge any fees… we’ll evaluate your situation… and present you your options so you can move forward and get this potential foreclosure sale behind you. Also, be sure to check out the free resources we provide for people looking for foreclosure prevention.