Local VA homeowners who are facing a financial challenge may find themselves in foreclosure.
Foreclosure is when the mortgage loan doesn’t get paid back and the bank begins the process to take ownership of the property to recoup its losses.
If you find yourself entering the foreclosure process, you might wonder if there is anything you can do about it.
In this blog post, you’ll read about a few foreclosure prevention measures in Front Royal that you can take to keep your home from foreclosure.
Foreclosure prevention measures in Front Royal VA
These foreclosure prevention measures might not all work in your situation but we’re telling you about them so you can make the decision for yourself:
1. Pay off your mortgage / sell your property. The most expeditious and straightforward means of halting the foreclosure process is by settling your mortgage debt in full. Ultimately, this aligns with the primary objective of the banks, as they seek to recoup their funds, and as a result, they would likely be amenable to allowing you to retain possession of your home. However, it’s important to acknowledge that this solution may not always be feasible, which could potentially be the underlying reason for finding yourself in foreclosure in the first instance.
2. Work out a deal with your bank. On occasion, it’s possible to negotiate an agreement with your bank wherein you engage in discussions with a mortgage or foreclosure specialist to explore potential modifications to the terms of your mortgage. This could involve restructuring your payments, such as extending the repayment period to lower the monthly installments, among other possibilities. However, it’s imperative to ensure that any arrangement aligns with your financial circumstances and objectives to avoid merely perpetuating the cycle of financial strain.
3. Do a short sale. A short sale involves selling the property and utilizing the proceeds from the sale to either reduce or completely settle the outstanding balance owed to the bank. This approach serves to shield your credit score from the detrimental effects of foreclosure while simultaneously alleviating the pressure exerted by the bank.
4. Give your deed in lieu. Yet another alternative to consider is a deed-in-lieu-of-foreclosure, a process whereby you voluntarily transfer the deed of your property to the bank in exchange for the assurance that they will abstain from initiating foreclosure proceedings. This arrangement typically proves viable only if the value of your property closely aligns with the outstanding mortgage balance. Otherwise, the bank may opt to pursue the discrepancy in value, potentially holding you liable for the shortfall.
5. File for bankruptcy. In certain respects, bankruptcy represents a more profound upheaval than foreclosure, as it exerts a pervasive influence on various aspects of your life. Nevertheless, upon initiating bankruptcy proceedings, the foreclosure process is mandated to cease, rendering bankruptcy a viable measure for averting foreclosure.
When faced with the dilemma of choosing between the two options, it’s prudent to contemplate the following: If you possess the financial means to sustain mortgage payments and harbor a desire to retain ownership of your home, then a foreclosure workout arrangement, denoted as option #2, likely emerges as your optimal course of action.
If you want to put everything behind you and move on with your life then consider selling your home and paying off your mortgage with that money.