How To Stop The Foreclosure Process #3

3. Scrutinize the Options - After contacting your lender, or in some cases the servicing company that handles the loan for an investor, you may have other options that are readily available. As a rule, lenders are not obligated to make modificaions to your loan, but many will take it into account as a viable option--one that is a benefit for the lender and you and can include refinancing as well. Acceptable options to talk over with your lender include:

• Deed in Lieu of Foreclosure - In this option, your lender may accept the return of the title to your home, but be aware that the lender may still sue for loss and report any uncollected funds due to loss to the IRS as taxable income to you. This alternative may have negative effects on your credit report.

• Claim Advance - If you have a private mortgage lender, they will occasionally provide a cash advance to bring your mortgage payments up to date. Often this money is interest free and may not have to be repaid for years.

• Re-Amortization - In this option the payments you have missed are added to the loan balance, bringing about a current account. Your debt will be higher and your monthly payments will increase unless the lender also agrees to prolong the term of the loan.

• Loan Modification - The objective of a loan modification is to lessen the amount of payment to a degree where the borrower can routinely make their mortgage payment in addition to paying other bills. In this scenario the payments you have missed and any extra fees are appended to the balance of the loan.

• Short Sale - Acknowledged by most one of the best alternatives available to circumvent foreclosure, the short sale is a more and more popular option. In this scenario, the lender agrees to take less than what you owe on the property, alleviating the homeowner of debt. Lenders are often more than willing to accept a short sale mainly because it considerably diminishes the expense and time involved in foreclosure proceedings. In the majority of cases, a short sale does less devastation to your credit than a foreclosure. A qualified REALTOR will be exceedingly helpful in finalizing the short sale process with you.

One note of warning, beware of any company claiming that they guarantee they can stop any foreclosure no matter what you owe. A short while ago, The Federal Trade Commission compiled a list of warning signs that a "foreclosure fixer" company may be a scam. Those warnings include any company that requires you to pay for services upfront, tells you to send mortgage payments to it directly, requires you to hand over the property deed, or tells you to refrain from contacting your lender directly.