Stop Foreclosure Now in Los Angeles

Are you behind on your mortgage payments and are trying to stop foreclosure now in Los Angeles?  If so, there is help.

The foreclosure process can be complex, confusing and very stressful. Sometimes you may even want to just bury your head in the sand and hope the problem will go away. But ignoring the problem usually only makes it worse. Just stay calm and know that there is help.

To successfully navigate the foreclosure process, a solid plan is necessary. While developing your plan, it is good to educate yourself as to all the options out there that are available to you to resolve your problem situation.

To Stop Foreclosure Now in Los Angeles, First Decide Whether or Not to Keep Your Property

Before you can decide on the best strategy to stop foreclosure, you need to ask the tough question of whether you really want, and can afford, to keep your property. This may be the most difficult and important decision you’ll make.

This is a critical decision because why spend all your precious time and resources fighting to keep a property that you really can’t afford, which only prolongs the pain and defers the problem to some time in the near future.

Although it may be difficult, you must take an honest look at your entire situation and may have to decide to cut your losses and move on. Of course, this is a decision only you can make. For most people, this decision rests on a few important considerations:

• Is there any equity in the property?
• Are you emotionally attached to the property?
• What is your current and future financial condition?
• Is Your Credit Worth Saving?

Let’s look at each of these in more detail.

Is There Any Equity in the Property?

Equity refers to the market value of your property less (1) the balance owed on all of the liens (legal claims) against it and (2) the costs of sale. Based on a purely economic decision, if there is a good amount of equity then you may want to keep it and if there is no equity or negative equity, then you may want  to let it go. Calculating your equity can often be a very painful task but it must be done.

Are You Emotionally Attached to the Property?

Even if you have no equity in your property, strong emotional ties may make the thought of losing it unbearable. For instance, if you’ve lived in your home for many years, your children were born and raised in the home, or you’ve made significant renovations and customized improvements, your property may be worth the sacrifice it will take to save it. This decision is very personal.

What is Your Current and Future Financial Condition?

If you believe your financial situation will improve in the next few months, you may want to fight to keep your property. On the other hand, if your financial future looks bleak, spending your time and money to fight foreclosure may not be prudent. You don’t want to fight to keep your property now, only to lose it eventually because you can’t really afford the loan payments.

Carefully consider the extent of your other debts and their effect on your financial situation. Perhaps you can trim your budget, sell a car or come up with other ways to bring your loan current, and meet your ongoing expenses.

Is Your Credit Worth Saving?

Another important consideration may be your credit score. Although your credit report may already indicate missed or late payments to your lender (and possibly other creditors), this may not be so bad because you can usually explain why you missed payments. However, most people want to avoid a foreclosure - or bankruptcy - appearing on their credit reports because most creditors will not give credit when they see these more serious blemishes.

Develop a Plan of Action to Stop Foreclosure now in Los Angeles

The best way to deal with a foreclosure is develop a concrete plan of action.  As you develop your plan, you must decide which strategies are most suitable to your situation. The various approaches are not mutually exclusive and you’ll probably want to pursue more than one strategy at the same time.  The best advice is to have more than one game plan so if one doesn’t work out, then you can quickly move to Plan B.

Ways to Stop a Foreclosure Now in Los Angeles

Below are some strategies to get out of foreclosure which are divided into two categories: 1) Strategies to keep your house and 2) Strategies to get rid of your house. Each method has its pros and cons and there is no one method that is best for everyone.  You must do some research to decide which option is best for you considering your unique situation.  However, you must act quickly because the longer you move through the foreclosure process, the less options will be available.

1) Strategies To Keep Your Home

Work With Your Lender - Believe it or not, lenders would prefer not to start foreclosure proceedings.  If you will contact them, they may be willing to work out something with you.  Just keep in mind that their main goal is to protect their asset, which is your home.

Some Possible Resolutions Your Lender Might Consider:

1. Forebearance
2. Repayment Plan
3. Loan Modification
4. Partial Claim
5. Debt Forgiveness

The key to getting great results with your lender to stop foreclosure fast in Los Angeles is to work with a qualified professional with experience in working with the banks to help homeowners out of their situation.

Increase Your Cash Flow – This may seem like a no-brainer, but it is sound advice. There are basically two ways to increase your cash flow: increase income and decrease expenses. Consider getting a second job or working overtime if possible.  Take a closer look at what you don’t use and don’t need.  Do you have spare automobiles, computers and other valuables you can sell? Maybe you can slash unnecessary expenses: dining out, movies, massages, expensive cable TV packages. Cutting expenses will show your lender you are willing to make sacrifices, boosting the chances they will work out a compromise with you.

Pros:
Can prevent or stop the foreclosure
Can force you to take a good look at your finances and tighten up your budget

Cons:
Working longer hours can detract from quality time with family and friends
Taking a stranger in your house can be uncomfortable and sometimes hard to deal with
If NOD is filed, then must have enough cash to cover all back payments and late fees

Chapter 13 Bankruptcy – If these other avenues fail to stop the foreclosure, homeowners can file Chapter 13 bankruptcy which legally puts an “automatic stay” on the foreclosure. At this point, all creditors are legally bound to stop their collection efforts, including selling the home in the foreclosure process. However, there are some exceptions and homeowners may still risk losing their home but an attorney can help explain the legalities.

Pros:
Puts a temporary stay on the foreclosure process
You may be able to stay in the house

Cons:
Must show eligibility and regular income sufficient to propose chapter 13 plan
Credit is negatively affected for many years

File a Lawsuit – You may be able to delay or stop the foreclosure by filing a lawsuit against the lender to challenge the foreclosure. Just know that the burden of proof will be on you and you’ll most likely need to hire an attorney to be successful. Unfortunately, hiring an attorney is always expensive when you have the burden of proof.

To prevail in your lawsuit against your lender, you will need to prove to the satisfaction of the court that the foreclosure should not take place because, for example, the foreclosing lender: cannot prove it owns the promissory note, did not act in compliance with state mediation requirements, violated the state’s Homeowner Bill of Rights, did not follow all of the required steps in the foreclosure process (as determined by state law), or made some other grievous error.

Pros:
Delays or stops the foreclosure

Cons:
Can be expensive to hire an attorney
You may only gain a few weeks
May only be a short-term fix to a long-term problem

Refinance Your Loan – One option may be to pay off your existing loan with a new loan on better terms. Depending on current market interest rates, current lending practices, and your credit rating, you may be able to obtain an entirely new mortgage loan on your home with which to pay off your existing mortgage loan that is delinquent and in danger of default. To refinance your home, a minimum equity is generally required; and you should accomplish this objective before an NOD is recorded.

Pros:
Stops the foreclosure process
Your credit starts to heal immediately

Cons:
May be hard to qualify when your credit is already damaged
Must have minimum amount of equity in the property
The loan approval process can be long and waste valuable time for false hope

Private Loans – In certain situations, maybe taking private loans may be enough to hold off foreclosure until you can get back on your feet financially. This would include loans from family members and close friends. It’s not easy to approach family and friends but if it means stopping foreclosure, then maybe swallowing your pride may be the thing to do.  You can put the loan in writing and maybe even offer to record a lien against your property as security for the loan amount.

Pros:
Can stop the foreclosure process

Cons:
The loan must be paid back
Can cause strained relationships and lost friendships

2) Strategies To Get Rid Of Your Home

Sell Your Home – If you don’t see your financial situation improving soon, you may have to consider selling your home to access the available equity. Speak with experienced real estate agents who are familiar with the home prices in your area so you can get an accurate market analysis. Although listing with a discount broker might sound like a reasonable way to save money, interview different agents and find one with strong marketing and sales experience. A discount broker will not save you money if s/he can’t sell the home before the foreclosure process ends.

Pros:
Stops the foreclosure process
You are free and clear of the mortgage burden
Your credit starts to heal immediately
You have a fresh start to move forward

Cons:
You must find another place to live and relocate your family
Coordinating your move with close of escrow can be challenging
May not have the money for an expensive move
No guarantee your home will sell in time

Will Your Lender Consider a Short Sale – If your home is worth less than what you owe on the loan which means you have zero or negative equity, you might be a candidate for a short sale. Basically, your realtor will need to negotiate with the lender to see if they would be willing to take less than the full amount due on the loan. Keep in mind that this DOES affect your credit just as a foreclosure would and not all homes qualify for short sales.

Pros:
Stops the foreclosure process.
You are free and clear of the mortgage burden
You have a fresh start to move forward

Cons:
You must find another place to live and relocate your family
Credit is negatively affected
The short sale can be a long and stressful process
No guarantee that your home will sell in time

Sign a Deed-in-Lieu of Foreclosure – A deed in lieu of foreclosure is a transaction where the homeowner voluntarily transfers title of the property to the lender in exchange for a release from the mortgage obligation. This essentially means the homeowner is signing the deed to the home back to the lender, thus closing out the loan and stopping foreclosure proceedings.  A deed-in-lieu provides the lender ownership without the delay and expense of a foreclosure sale.  Also known as, a “friendly foreclosure”, a deed-in-lieu of foreclosure may carry less credit stigma than a foreclosure or a “short sale.”

Pros:
Stops the foreclosure process
You are free and clear of the mortgage burden
May be able to stay in the house

Cons:
Credit is affected but may have less negative impact
You no longer own your house

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These are just a few of the many options that are available. The bottom line is that you don’t have to sit back powerless while your house and your happiness slips away from you. We can help you take back control of your situation and your life!

In most cases, we can stop foreclosure from happening because, as you know, a foreclosure on your record can ruin your credit for up to 7 years, making it difficult to get another house, car, credit card, or any type of credit whatsoever.

Every individual situation is unique and personal, and finding the best solution depends on your particular problem situation.

Please contact us at (818) 392-4845 for a FREE Evaluation and Assessment as well as to discuss which options are best for you.  If you need more information on the foreclosure process and How To Stop Foreclosure in Los Angeles? Download our FREE Stop Foreclosure Guide here.