Local OH 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’re on the verge of experiencing the foreclosure process, you may be questioning if there are any viable countermeasures.
In this blog article, we’ll explore several foreclosure prevention strategies available in Springfield, which may potentially help you avoid losing your home to foreclosure.
Foreclosure prevention measures in Springfield OH
The following foreclosure mitigation strategies may not be universally applicable, but it’s critical to be informed about them so that you can ascertain the best approach for your unique circumstances:
- Clear your mortgage / dispose of your real estate asset. The most straightforward and instant solution to halt the foreclosure process is to clear your mortgage debt. In essence, this is the ultimate goal of the bank—recovery of their lent amount. If you can manage to do this, the bank would certainly welcome your continued stay in your home. However, it’s understood that this might not always be feasible, which is likely why foreclosure has become a possibility in the first place.
- Negotiate a favorable arrangement with your bank. In some cases, it might be possible to strike a compromise with your bank by discussing your situation with a mortgage or foreclosure expert. This might involve restructuring your mortgage in a way that lowers your monthly payments by extending the repayment period. It’s crucial, however, to ensure that the newly agreed terms are sustainable for you in order to avoid a repetition of the same predicament.
- Opt for a short sale. A short sale involves selling your property and using the revenue generated from the sale to settle or significantly reduce your outstanding balance with the bank. This strategy not only prevents a foreclosure from damaging your credit rating but also relieves the bank’s pressure for repayment.
- Surrender your deed. There’s an option known as a deed-in-lieu-of-foreclosure, wherein you voluntarily surrender the title to your property to the bank, and in return, they agree not to initiate foreclosure proceedings. However, this option tends to be viable only if the market value of your house is roughly equivalent to the amount owed on the mortgage. Otherwise, the bank may still seek to recover the balance amount.
- Declare bankruptcy. Although declaring bankruptcy can have far-reaching implications on your overall financial life, it also puts an immediate halt to the foreclosure process. Thus, it can be considered a foreclosure deterrent, albeit a drastic one.
If you find yourself unsure about which strategy to adopt, here’s a guiding principle: If you can manage the payments and have a strong desire to remain in your house, then a foreclosure workout agreement (as mentioned in point #2) could be your most advantageous option.
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.