Foreclosure can be a nightmare for homeowners in California who get behind on mortgage payments. The good news is that there are things you can do to stop a foreclosure before your home is actually taken by your lender. Taking action is always better than ignoring warnings.
Try to prevent a Notice of Default
Lenders will send you a Notice of Default before actually foreclosing on your home. Once this notice is sent to you, your options for working out a payment plan or modifying your loan terms will be limited. The Notice of Default is the first step to foreclosure, so it’s best to try to work something out before you receive it.
If you are behind on your mortgage payments or you know that you are at risk of bankruptcy, call your lender. You may be able to have a payment forgiven, spread out the money you owe over a period of months or add your back payments to your total loan balance. In some cases, your lender may be willing to refinance your loan so that it is more manageable.
Take action after the Notice of Default
Lenders are usually much less willing to work with you after a Notice of Default has been sent. However, there are still actions that you can take to avoid foreclosure. If can get up to date on your payments, you may be able to reinstate your loan. You may also consider filing for bankruptcy, which can stall a foreclosure while you are unable to keep up with your bills. There are also several options for people that are willing to sell their home before it is foreclosed on.