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Stop Foreclosure with a Shortsale or a Deed in Lieu of Foreclosure.

Stop foreclosure on your home by taking action today. The biggest mistake people make when they fall behind on their mortgage payments is they believe they can figure a way out on their own. They will attempt to borrow money from family or friends or run up to their local check advance company in an attempt to obtain cash. This only leads to additional debt and is a band-aid fix at best.

Instead of borrowing money to stop foreclosure, a better way to address the problem is to contact your lender. Ask to speak to someone in the Loss Mitigation Department. If your lender has already initiated the foreclosure process, chances are a Loss Mitigator has been assigned to your account.

Loss mitigators are employees or independent contractors who work for lending institutions. Their primary role is to assist Borrowers who have defaulted on their mortgage note. In order to stop foreclosure you are required to work with a bank loss mitigator.

Much depends on the Borrower's financial situation and ability to repay delinquent payments. If the delinquent amount can be repaid in full within 30 days or less, the lender may simply reinstate the mortgage note and stop foreclosure proceedings.

Most people are not in position to repay their delinquent payments in full within such a short timeframe. Prior to contacting the lender, Borrowers should organize their expenses, tally their income and prepare a realistic repayment plan. The loss mitigator will need to know this information in order to determine which type of stop foreclosure plan they can offer.

It helps to offer some upfront money when negotiating with loss mitigation. A good starting point is at least 25-percent of the normal monthly mortgage payment. Borrowers unable to offer upfront money should determine how much they can pay by specific dates prior to contacting loss mitigation.

The loss mitigator reviews the Borrower's financial information and proposed repayment plan. They may offer a Forbearance Agreement or Loan Modification. These arrangements provide Borrowers with some flexibility in repayment terms. The lender may agree to temporarily reduce or suspend mortgage payments. They might rollover delinquent amounts to the end of the mortgage by extending the terms of the note. Much depends on the circumstances which caused the Borrower to fall behind on his mortgage.

Selling the house is another option to stop foreclosure. If there is equity in the home, the lender may agree to stop foreclosure proceedings if the Borrower lists their house with a licensed Realtor. Other lenders may allow Borrowers to list the property as "For Sale by Owner".

When Borrowers are upside-down on their mortgage payments and owe more than the property is worth, loss mitigators might approve a short sale. This type of real estate transaction allows the Borrower to sell the house for less than is owed on the mortgage note. Short sales are complex and complicated, therefore it is highly recommended to work with a real estate attorney or individual who specializes in short sale transactions.

Last, but not least, a Deed in Lieu of Foreclosure can stop foreclosure and is somewhat less detrimental to your credit than foreclosure. Deed in Lieu allows Borrowers to voluntarily leave their home and turn it over to the bank. All monies paid into the home are forfeited and the Borrower is responsible for paying any outstanding creditor or tax liens filed against the home.

Keep in mind most banks do not want to undergo foreclosure proceedings. It costs them money and time. Once they obtain the deed to foreclosure homes, they must then go through the process of selling them. Therefore, loss mitigators are generally willing to work with Borrowers to stop foreclosure and help them get back on track with their mortgage payments.