How To Stop Foreclosure
Fast In Lake Charles, Louisiana

Facing an imminent foreclosure can be nerv-racking and be a cause of stress and anxiety. We do not want to lose one of the most important things to us - our homes, our personal shelter we have acquired for ourselves and our families.

While, believe it or not, a few people have been known to bury their faces in the sand and choose to believe their homes just cannot be taken away from them, most people (most likely including you) know that being pro-active about stopping a foreclusre is the only way to stop a foreclosure.

The problem is most people do not know the possible ways by which they can stop a foreclosure, and this is what this article will address - how to stop a foreclosure fast.

Their are bout 14 ways to stop a foreclosure. This article does not focus on all of them because most of these paths are not fast or appealing. This article focuses only on the 4 methods that make it fast. If you want to read the full list of options for stopping a foreclosure, click here.

Now, here are 4 methods employed to either bring a foreclosure to a screeching halt, or reduce the impact of a naggingly impending foreclosure. Of the 4 methods provided, number 2 is the least speedy. As for number 1 it pauses the foreclosure and gives you time to pay up later, but number 4 nukes the foreclosure altogether and at the same time saves your credit.

I recommend you read everything from number 1 to number 4 to arrive at the alternative that best suits you.

1. A Forbearance Agreement

What Is A ForBearance Agreement:

This is an agreement where the lender allows the homeowner to temporarily pause or reduce payments for a certain period. During this period, the lender agrees not to initiate foreclosure, but you as the homeowner are still responsible for eventually paying the missed payments, typically through a repayment plan or loan modification, once the forbearance period ends.

How to Do It:

As the homeowner, you need to contact the lender, explain the financial hardship, and request a forbearance agreement. Below are the steps to involved:

1. Contact the Lender: Reach out to your mortgage lender as soon as possible to explain your financial hardship. Provide specific reasons like job loss, medical issues, or unexpected expenses.

2. Submit a Hardship Application: The lender will usually require a formal application along with documentation proving your financial difficulties (e.g., bank statements, pay stubs, medical bills).

3. Negotiate Terms: Discuss the terms of the forbearance with the lender, such as the duration of reduced or paused payments and how the missed payments will be repaid after the forbearance period.

4. Sign the Agreement: Once both parties agree on the terms, review and sign the forbearance agreement. Make sure you fully understand the repayment terms before committing.

5. Follow Up: Stay in communication with the lender throughout the forbearance period to ensure you comply with the agreement, and be prepared for the repayment process once the forbearance ends.

2. A Short Sale

What Is A Short Sale?:

This involves selling the property for less than the remaining mortgage amount with the bank's approval. The bank agrees to accept the reduced sale price and forgives the remaining debt. Athough your debt gets forgiven, your credit may still be affected. A short sale is less damaging than foreclosure as it allows you to move on with fewer financial consequences.

How to Do It:

The homeowner or a real estate agent needs to negotiate with the lender. Below are the steps involved in completing a short sale in Lake Charles, Louisiana:

1. Assess Financial Hardship: Find out if you're eligible for a short sale by ensuring you can no longer afford the mortgage payments because of a valid financial hardship like a job loss, medical issues, or other significant expenses.

2. Contact the Lender: Provide notification to your lender that you're considering a short sale. You will need to submit a hardship letter to your lender (the bank) explaining your financial difficulties, along with supporting documents like income statements, bank statements, and tax returns.

3. Hire a Real Estate Agent: Choose a real estate agent experienced in short sales to list your property. They understand the short sale process very well and can sell your property off but a few of them may want to buy it for themselves making the short sale process much quicker.
The thing about short sales is that because your house is being sold at a lower price than it is worth, the agent can sell it much more quickly than otherwise (through their list of clients and their network of other agents).

4. Submit a Short Sale Package to the Lender: Your agent will help you submit a short sale package to the lender, which includes:

• Hardship letter
• Financial documents
• A comparative market analysis (CMA) showing that the home’s value is less than the mortgage balance
• An offer from a buyer, if available

5. Get Lender Approval: Immediately you have an offer, submit it to your lender for approval. Your lender will review the offer and your financial situation to decide whether to approve the short sale or not. This process can take several weeks or months.

6. Negotiate Terms: Your lender may counter the offer from your buyer or ask for additional documents. Be prepared to negotiate with your lender to finalize the terms of the sale.

7. Close The Sale: If the lender approves your short sale, you will proceed to closing. The sale will get rid of your mortgage debt, and your lender will receive the proceeds from the sale, but the debt difference may still affect your credit.

8. Handle Remaining Obligations: Depending on your lender’s terms, they may either forgive the remaining balance (referred to as a deficiency) or seek a deficiency judgment. Make sure that you understand whether or not you will owe any remaining debt after the sale.

9. Tax Implication: Be aware of the possibility that the forgiven mortgage debt may be considered taxable income unless you qualify for an exemption. Talking to a tax advisor is highly recommended.

3. Deed in Lieu of Foreclosure

What It Is A Deed in Lieu of ForeClosure:

A deed in lieu of foreclosure is a legal agreement in which you voluntarily transfers ownership of your property to the lender in order to avoid foreclosure. In exchange, the lender forgives the remaining mortgage debt. This option is considered when a homeowner can no longer afford the mortgage payments and wants to avoid the negative consequence of a foreclosure. Although it still affects the homeowner’s credit, a deed in lieu is generally less damaging than an outright foreclosure and may present a more graceful exit from the financial obligation.

4. Selling the Property Quickly

What It Is:

Selling the home to a cash buyer or investor before the foreclosure sale date.

How to Do It:

Find a real estate investor or company that buys homes for cash quickly. This could be a good option if there's sufficient equity in the property.