Your home is one of the biggest investments of your life, so you want to protect it from foreclosure. Falling behind on your mortgage payments doesn't have to mean losing your house. Taking the following steps can prevent legal action by your lender that puts your property at risk. 

3 Options for Avoiding a Home Foreclosure 

1. Negotiate a Loan Modification

A lender must spend tens of thousands of dollars to foreclose on a house, and the process takes an average of 1.5 years in upstate New York. In a loan modification, the lender agrees to adjust the borrower's loan terms rather than foreclose. 

Generally, a modification lowers the monthly payments. This happens by reducing the interest rate, extending the loan length by several years, or adding past due amounts to the current balance. A loan modification can be a good solution if your income stops temporarily or decreases permanently. Be prepared to show your ability to make the payments under the new arrangement.  

2. Seek a Loan Forbearance

With a loan forbearance, the lender allows you to stop making payments temporarily. Many homeowners with federally backed or sponsored mortgages are eligible for this option for six months or more due to financial hardship related to COVID-19. 

The federal COVID-19 forbearance program includes Department of Housing and Urban Development, Veterans Affairs, Federal Housing Administration, Fannie Mae, and Freddie Mac mortgage loans. However, the process isn't automatic. To get started, make a request to your mortgage servicer.

3. File Bankruptcy

If modification and forbearance aren't workable options for you, filing for Chapter 13 bankruptcy helps prevent foreclosure and allows you to keep the home. You need a reliable source of income to make payments under a court-approved plan for three to five years. If you have other secured debts, such as motor vehicles or rental properties, or owe taxes or child support, this option will protect your assets and allow you to catch up on payments.  

To explore your alternatives to foreclosure and determine which is right for you, consult John D. Wieser, Esq., PC. Attorney Wieser has served Rochester, NY, since 2001. He offers wise counsel and representation in foreclosure, bankruptcy, and family law cases. For more information about how he can help you, visit his website. Call (585) 328-0660 to arrange a consultation.