Local MI homeowners who are facing a financial challenge may find themselves in foreclosure and are looking for ways to avoid foreclosure in Metro Detroit MI.
Foreclosure is when the mortgage loan does not get paid back and the bank starts the process of taking ownership of the home to recoup its losses.
If you find yourself entering the foreclosure process, you may wonder if there is anything you can do to stop it.
In this blog post, we describe a few foreclosure prevention measures in Detroit that you can go with to avoid foreclosure in Metro Detroit MI.
Foreclosure prevention measures in Detroit MI
The following foreclosure prevention measures might not all work in your situation but we are telling you about them so you can make the best decision for yourself:
1. Pay off your mortgage / sell your property. The quickest and easiest way to stop the foreclosure process is to pay off your mortgage. Ultimately this is all the banks wanted in the first place so they would be glad to let you stay in your home and they receive all their money back. Of course, this isn’t always a possible option, which is perhaps the reason that you find yourself in foreclosure in the first place.
2. Work out a deal with your bank. Sometimes you can work with your bank where you discuss with a mortgage or foreclosure specialist about changing the structure of your mortgage. Maybe your payments get spread out so they become lower each month, for example. Just ensure that the deal works for you – you don’t want to just repeat the process and have to go through foreclosure again because you can’t afford the new payment.
3. Do a short sale. A short sale is when you sell the property and use the proceeds of the sale to pay down or pay off your outstanding amount with the bank. Although a short sale may still impact your credit score, this keeps a foreclosure from impacting your credit score too much and it gets the bank off your back!
4. Give your deed in lieu. Another option would be a deed-in-lieu-of-foreclosure, which essentially means that you will hand over the deed to your house to the bank and they agree not to put you through foreclosure. This will usually only work if your house is worth around the same amount that you owe on the mortgage. If not, the bank may pursue the difference.
5. File for bankruptcy. In some ways, bankruptcy is far more dramatic than a foreclosure because it impacts your whole life, not just the house. However, once you file for bankruptcy, the foreclosure process has to stop so it is still a foreclosure prevention measure.
If you are not sure which one to do, consider this: If you can afford payments and you want to stay in the house then a foreclosure workout arrangement (#2) is probably your best 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. These were the ways to avoid foreclosure in Metro Detroit MI.
Considering selling your MI house?
We buy houses in MI for cash and would love to see if we can help you during your short sale. Contact us by filling out the form on this page and we’ll see if we can work with you.