There is a common misconception among people that if someone is faced with foreclosure, the only way out is through filing for bankruptcy. However, real estate experts will tell you that declaring bankruptcy In case you are being faced with foreclosure; then you have other better options to avoid foreclosure than bankruptcy. Bankruptcy will stay on your credit report for about ten years, and you will always respond yes whenever you are asked in a credit application if you have ever filed bankruptcy, it is something that has a long lasting effect. Therefore instead of being identified as a person who ever filed bankruptcy to avoid foreclosure of your home, at least explore the following options which you will find helpful to your case and see which one suits you best.
Sue your mortgage company
You can choose to sue your mortgage company before foreclosure to have your defenses evaluated by the court. In almost every mortgage document, it asserts that you have the right to have any cases heard in court in case you are facing a foreclosure. So the only way to have your cases heard in court is to sue your mortgage company because foreclosure is not going to be filed in court. Therefore, this will help you to turn non-judicial foreclosure to a judicial foreclosure. Then the mortgage company will stop the foreclosure as they know the consequences they can face if they go ahead with a foreclosure.
Obtain a loan modification
This option is best applicable if the foreclosure not so near. Just apply and fill the paperwork 38 days or more before the closure date, something that will stop the foreclosure. Though you still run the risk of foreclosure if the request is denied, as long as you make a good effort to get the best possible package as fast as possible, then you will increase your chances of success.
Reinstate your loan
You are advised to ask the mortgage company for the reinstatement amount and go ahead to pay that money the right way, and you will avoid the foreclosure. But you have to be cautious and ensure that you are on top of everything, even after paying just protect yourself from the mortgage company. The option is best applicable if you have the money to reinstate. The good thing is that this can be done close to the foreclosure date.
Using RESPA letters
You can use the RESPA letters to convince your mortgage company to stop the foreclosure. You just point out to the mortgage company using letters the errors that they have made something that will give them a chance to correct those mistakes. Mortgage Company can find a need to stop the foreclosure and deal with the issues that you are raising. You can take this option when you are thirty days from the foreclosure.
Therefore as a homeowner in Houston Texas, you have some good alternatives to avoid the foreclosure instead of using bankruptcy. You are encouraged to use other means when you are faced with the risk of foreclosure. Because when you file bankruptcy, you will be identified by it forever, thus it is good to try out the other options mentioned above.