Facing foreclosure can cause you a lot of stress, physical and mental. Although a foreclosure can be a scary process, you don’t have to panic. There are ways you can stop foreclosure and save your home. Most lenders prefer to offer you alternatives other than selling your home. However, if you cannot negotiate a loss mitigation alternative with your lender, there are still other options you can consider to stop foreclosure auction.

• Short sale

A short sale is one of the loss mitigation alternatives, and your lender might not accept immediately. However, if you have found a buyer who is willing to pay a reasonable amount, most lenders will rather take the offer than continue with foreclosure. In a short sale, the home is usually sold for less than the mortgage you owe. Therefore, it is crucial to have your lender consent before going ahead with the sale. Make sure an agreement is signed to prevent your lender from suing you for deficiency judgment later.

• Reinstate your loan

If you have a substantial amount of money that can cover all your missed payments and late charges, you can approach your lender to request loan reinstatement. Most lenders will be reluctant to approve your request. However, if you will pay a lump sum amount, your request will be granted.

• File for bankruptcy

Filing for bankruptcy is another way to stop foreclosure auction immediately. The court gives an automatic order upon the submission of your petition. The order prevents any form of lender’s collection activities, such as foreclosure. Bankruptcy will help you keep your home and also grant you relief. The relief will make it easier for you to catch up with your mortgage payment.

Contact your lawyer to discuss in details about these options.  The earlier you take action, the better the chances of stopping foreclosure auction.

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