How to Delay Foreclosure for as Long as Possible

How to Delay the Foreclosure Process

By: Jon Boyd Barrett

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The US housing market bubble has finally burst, and many American home owners have already been served with a foreclosure notice, or soon will be.Not fulfilling your monthly mortgage payments will sooner or later result in foreclosure, and since so many Americans can no longer pay their mortgages—due to the almost criminal practices of banks and lenders in recent times—a lot of families are left thinking, “How can I delay my home's foreclosure?” Fortunately, there are creative and efficient ways to delay the foreclosure process, which is exactly what this article is all about!

Never Ignore Your Mortgage Company

The first step to putting off a foreclosure notice is diligently responding to absolutely every notice you get from your mortgage company. Don't just get in touch with the customer service center, but call the Loss Mitigation department, which is where you'll really be able to have effective dialogue on reaching an agreement on your mortgage. Keep track of all your communications with the company, as there is no room for confusion here (and you definitely don't want to be taken advantage of simply because you forgot what had previously been established). If you prove yourself to be involved in negotiating with the mortgage company, and not aloof to your responsibilities, you may very well be able to qualify for one of the following options:

“Mortgage Modification,” which is a way to refinance your monthly dues
“Special Forebearance,” a repayment plan which takes into account your particular financial landscape, and may include suspension of payments for a brief period
“Pre-foreclosure Sale,” which can save you from the negative effect of a foreclosure
“Deed in lieu of foreclosure,” which won't let you keep your home either, but is less damaging to your credit history than a foreclosure.

Exhaust Your Legal Options

Most home owners that have defaulted on their mortgage payments, think that their lender will inevitably win in the courts, and therefore do absolutely nothing to challenge court motions presented by the lender. Though your lender may eventually win out in a legal battle, the advantage to properly using the legal system is that you can make things take a lot longer than they would if you never challenged a single motion. The courts system is incredibly complex, and your lender is likely to overlook certain formalities and requirements simply because they believe you won't challenge them legally; therefore, you need to challenge absolutely every court motion, and respect procedures to the foot of the letter.

Getting professional advice, from a lawyer, could be invaluable to prolonging foreclosure, as well as knowing how to manage your times properly in legal proceedings. For example, if you have a certain time window to challenge a motion presented by your lender, don't do so immediately; wait until the eve of expiration for your challenge to make it, as doing so earlier will solicit an earlier response from your lender. Get to know these ins and outs to the legal system before taking on the legal battle, of course, but never hesitate to use the courts as a forum for protecting yourself against foreclosure.

Two other legal strategies that have emerged as effective (though not necessarily available to every person facing foreclosure) are requesting to have your entire mortgage rescinded because of non-compliance with Truth in Lending laws, as well as contesting ownership of the original loan. Consult a lawyer to find out if you might be able to utilize either of these strategies.

Talking to an HUD-Certified Housing Counselor

The US Department of Housing and Urban Development is a good resource for people facing foreclosure. You will find a convenient guide on their site to avoiding foreclosure, available at HUD/Foreclosure. You will be able to find out about crucial federal, state, and local programs that could make all the difference during your moment of hardship, and there are also links to debt-management counseling services. Furthermore, you'll be instructed on how to avoid foreclosure scams, which prey on the ignorance and complacency of ordinary people facing foreclosure; common tricks include “equity skimming” and the use of false counseling agencies, so make sure you are dealing only with an HUD-certified counseling firm.

Can Bankruptcy Stop Foreclosure?

If all else fails, filing for bankruptcy may stop your foreclosure indefinitely—or at least a few more months.

In addition to giving you the chance to avoid foreclosure, filing for bankruptcy can allow you to take care of all the other debt you've amassed, but have had to ignore while working out your mortgage woes. Basically, as long as your bankruptcy filing is being processed by the courts, your lender has virtually no chance of effectuating the foreclosure process. See our article "How to File for Bankruptcy."

Avoiding Situations That Produce a Foreclosure

In a broader sense, there are tactics you can pursue that will help you avoid ever being in the situation of having an imminent foreclosure bearing down upon you. If you can avoid incurring excessive debt, avoid buying into adjustable-rate or otherwise fishy and exotic mortgages, avoid purchasing homes with price tags way beyond your means, and assure yourself that you've got sufficient emergency resources and insurance, you'll be ahead of the game. And, if you absolutely cannot manage to stay up to date with your mortgage payments, notify your lender and immediately begin working towards a mutual, out-of-court solution; you'll be surprised how willing your lender will be to do so, as most foreclosures are costly to your lender, and only are in their interest as a last resort.

Other Resources

Take a look at a few other foreclosure-avoidance guidance on the web, where you'll be able to get even more info on how to get around this credit-killing process. Go to Investopedia or ForeclosureAssistanceofAmerica for more valuable information on this worrying topic.
Whatever it is you do, you need to find the way to drag-out the foreclosure period for as long as possible, without stepping outside the bounds of the law.

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