Foreclosure auctions are a nightmare for a homeowner who has pledged his property as security for his debt. There are just about a few ways for the homeowner to stop the foreclosure using money, agreement to forgo money or through the court system. Here are some of the ways to stop a foreclosure.Stressed person in office

Never panic or lose hope in this state of distress. If you are in a problem, try your best to face it before giving up. There are always sources for money just at the reach of hand. You can make a partial payment and delay the foreclosure for the least part. Unemployment insurance, disability insurance and savings are each potential cash sources. Household budgets need to be cut off as much as possible. Cars and jewels, if any, can be traded in for cash, and there is the retirement fund which is also a possibility.

This is the time when you will have to remember you’re dear and near ones. There will be a lot of people ready to lend a helping hand; as long as you reach out to them.

If there is no possibility for a pay off on a partial amount to delay the foreclosure or if you have missed a few payments, you must have a rendezvous with the lender and workout an agreement that effectively modifies your mortgage so that the foreclosure can be stopped before going to completion. This may not be as easy as it seems but it might turn out to be a relief for the homeowners.

Other than just signing an agreement there may be a few workout options offered by the lender. Few lenders will even be prepared to modify the loan arrangements.

In few cases the loan amount may be self insured by the lender or there will at least be private mortgage insurance. The PMI will be ready to pay an advance amount to bring the loan to current status. This amount may be usually interest free or need not be repaid for several years.

If your property has met with disasters like hurricane, earthquakes, etc, it is essential that you contact the lender immediately. There are numerous relief measures on the loan in such cases, like suspension of late fees, no late payment reports to credit bureaus, a pause in foreclosure actions and even modified payment schedules.

There is an option of forbearance in which there is a temporary change in the mortgage terms. The change may be in the form of having the right to skip a payment or to pay a small amount for a whole year. This can be a temporary relief for the homeowner.

In cases when the borrower is financially down for a long period, some modifications to the mortgage terms are possible like extending the mortgage term. This in turn reduces the interest rate. Permanent reduction is always welcomed by a borrower and even temporary reduction will be a relief of immense measures.

Re-amortization is an option in which the missed payment amount is added to the loan balance, thereby increasing the debt amount. This will in turn increase the interest amount unless the lender agrees to extend the mortgage term.

Reinstatement is another option in which you pay off two or three missed payments by paying the late fee and the other costs and continuing the loan as before.

Through the repayment plan one can distribute the missed payment amount throughout the interest amount until you pay off the missed payment amount.

There is always the option to refinance the loan. There are so many loan options available in today’s markets in which the interest rates for the first few years are lesser than the latter years.

Selling is the final resort for a homeowner who has no hope in paying off the debt, due the extreme financial crisis he is facing. Selling off the property before the foreclosure will be more profitable for the borrower than a foreclosure. He can even preserve his credit report and pay off the debt. A foreclosure in the credit report will keep him away from credit for several years.

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