Owning a home is a source of pride for many Maryland residents, but the reality is that life and your financial situation are not always within your control. If you lose your job, find yourself facing excessive living expenses or have had a serious change to your income, you may have a hard time making your house payments. If this is the case, FindLaw gives you some options to help you avoid foreclosure.
One alternative to foreclosure is a mortgage modification. In this situation, the lender may allow you to refinance the mortgage or extend the terms of the loan. The main benefit is that you end up with a lower monthly payment that matches your current financial situation.
Another alternative is a special forbearance. This is helpful for those who have seen a sudden increase in costs of living or a serious decrease in income. With a forbearance, your lender may allow you to suspend your payments or reduce them for a time.
You may also be able to work with your lending institution to apply for a partial claim. This means that the FHA insurance fund makes a one-time payment to bring your mortgage up to date, but you must be able to make full payments after the claim to qualify.
With a deed-in-lieu of foreclosure, you can voluntarily give the lender the property back. While this does not allow you to keep your home, it is easier on your credit than foreclosure is, which could affect your ability to borrow for another home once you get your feet under you financially.
Finally, some homeowners opt for a pre-foreclosure sale. This means that you sell the home for less than you owe on it. While each situation is unique, there are options that allow consumers to avoid the hopelessness that comes with foreclosure.
This is intended for educational purposes and should not be interpreted as legal advice.
