COVID has brought a lot of stress to Americans in numerous ways. However, one of the major concerns that Americans face is handling foreclosures due to COVID. Luckily, there are steps that you can take to give yourself a better chance at protecting your home from foreclosure:
Communication with Your Lender is Key
The best option you can consider is being honest with your lender. If you tell them you are struggling financially, then they may be able to provide alternatives that can make your finances more manageable.
Consider the Home Affordable Modification Program (HAMP)
This is a program that can provide the opportunity for you to increase the length of your loan to permanently lower your monthly payments. You will need to have a discussion with your lender to see if this is an alternative that would work for you.
Other Programs to Consider (HARP)
While the HAMP program is a great tool, there are also other programs available that can help. The Home Affordable Refinance Program (HARP) is a resource that can help you switch to a fixed-rate mortgage to make your payments easier to handle. This will only be an option for you to consider if either Freddie Mac or Fanny Mae owns your mortgage.
Now these are good tips for trying to stay out of foreclosure. However, if you have already begun foreclosure then you will want to handle your situation differently:
Sell Your Home
This is the best option if the market value of your home is greater than what is due to the lender. You will want to make sure to hire a real estate agent to properly market your property in hopes of getting a sale quickly and efficiently. If you are still trying to sell your home but the home’s value is less than what you owe on the mortgage, then you will need to have another conversation with your lender to figure out a plan.
File for Bankruptcy
If all else fails, then you may need to consider filing for bankruptcy. This will stop the foreclosure process until your case can be assessed in court. You will want to make sure there are no other options available because bankruptcy has a lot of implications when it comes to your financial situation.