At the Albuquerque law firm of Giddens & Gatton Law,amp; P.C., we help people across New Mexico facing severe debt problems to find legal solutions. Unfortunately, debts quickly mount when a consumer is faced with unexpected job loss or a medical crisis, often putting his or her home at risk of foreclosure when mortgage payments are missed.
Non-bankruptcy solutions to prevent foreclosure
As soon as it is clear that you will miss mortgage payments with no immediate solution, it is a good idea to talk to a consumer protection lawyer who can advise you about the range of possible solutions, both outside of and including bankruptcy.
If you want to keep your home and continue to pay your mortgage, it may be possible to negotiate a solution with the lender, bank or mortgage company. This probably would involve a mortgage modification, including:
- Forbearance or deferral: The bank would put payments on hold for a time so that you do not fall farther behind.
- Repayment plan: You may be able to negotiate a plan for repaying what is past due over time and make the loan current again.
- Refinance: The lender may agree to completely refinance the loan with new terms that result in lower payments.
- Modification: The bank might be willing to modify the terms of the existing mortgage to make payments more affordable, such as lowering the interest rate or lengthening the term of the loan. Sometimes the mortgage holder agrees to roll the missed payments back into the loan balance so that you start out with a current payment again.
- And others
Your attorney can communicate and negotiate with the bank on your behalf as well as help you provide all needed documentation to support your request. In addition, a governmental program that could provide some type of assistance in this process.
If you decide to give up your residence to prevent foreclosure, a short sale or deed in lieu of foreclosure are two processes that potentially allow you to either sell the home or sign it over to the bank in exchange for mortgage satisfaction.
Your lawyer will also explain the pros and cons of bankruptcy in the attempt to save your home ownership. Chapter 13 bankruptcy is often a good option to prevent foreclosure for a homeowner with regular income. A court-approved three-to-five-year repayment plan could include provisions for making up past due mortgage payments and keeping current as they become due.