What To Do When You Receive the NOD

 

If you are losing your home, you have options available to stop the foreclosure.  Failing to make payments on your home for whatever reason does not mean that your home will be automatically lost.  Consider the options below in the order written:

1.    Reinstate the Loan

The best option and solution, of course, is to bring the loan current.  Pay all current and past due payments in full.

 2.    Modify Your Current Loan

If it is possible to refinance the property thereby reducing the interest rate and monthly payments, then the homeowner would be able to remain in the property by paying off the existing defaulted mortgage loan obligation.  There are also many other solutions to resolve the problem.  Please see my article “What Are Your Options to Avoid Foreclosure” and “Solutions for Staying in Your Home”.

 3.    Sell or Short Sale

In today’s current real estate market, it may not be possible to pay off the balance of your loan; therefore, a short sale may be the only viable option.  A short sale is a process that allows you to sell your house for less than the current outstanding balance.  This process requires the approval of your lender(s).  However, if you are not equity broke, then the best solution would be to pay off the entire outstanding balance and eliminate the entire foreclosing procedure

 4.    Bankruptcy

This proceeding is never a highly recommended option because of the inevitable outcome which is… foreclosing on the property.  Bankruptcy will only delay the process.  Many homeowners use this process to stall the lenders from foreclosing to allocate ample time to reorganize their financial positions.  This could be a great solution to the problem, however, if it fails, then consider the fact that it may result in a severe impact on your credit.  Bankruptcies remain on your credit for 10 years as opposed to a foreclosure only 7 years. 

 Never let impaired credit, prevent you from purchasing another home.  After bankruptcy,  be diligent about re-building your credit over the next 2-4 years.  Most lenders will allow you to buy another home when you can prove that income, employment, credit and assets are stable. 

 5.    Sue Your Lender

You may be a victim of illegal and fraudulent lending practices or wrongful foreclosure proceedings aka “robo-signing”.  If you are a victim of wrongful proceedings, you may be entitled to seek damages.  Read more about Lenders illegal and fraudulent practices

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