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Local AZ homeowners who are facing a financial challenge may find themselves in foreclosure.
Foreclosure is when the mortgage loan doesn’t get paid back and the bank begins the process to take ownership of the property to recoup its losses.
If you find yourself entering the foreclosure process, you might wonder if there is anything you can do about it.
In this blog post, you’ll read about a few foreclosure prevention measures in Phoenix that you can take to keep your home from foreclosure.
Foreclosure prevention measures in Phoenix AZ
These foreclosure prevention measures might not all work in your situation but we’re telling you about them so you can make the decision for yourself:
1. Pay off your mortgage / sell your property. The most efficient and straightforward method to halt the foreclosure process is by settling your mortgage. Ultimately, this aligns with the banks’ primary goal, and they would gladly allow you to remain in your home while recovering their funds. Granted, it’s acknowledged that this may not always be feasible, potentially contributing to the situation that led to foreclosure in the first instance.
2. Work out a deal with your bank. On occasions, it’s possible to negotiate an arrangement with your bank by engaging in discussions with a mortgage or foreclosure specialist. Exploring options such as restructuring your mortgage, like spreading out payments to reduce monthly obligations, could be considered. However, it’s crucial to ensure that any deal struck aligns with your needs; avoiding a mere repetition of the same challenging process is imperative.
3. Do a short sale. A short sale involves selling your property and using the sale proceeds to pay off the outstanding mortgage amount. By taking this strategic step, you prevent the negative impact of foreclosure on your credit score. Additionally, the short sale offers relief from the pressure imposed by the bank, providing a more controlled resolution to your financial situation.
4. Give your deed in lieu. Consider another option known as a deed-in-lieu-of-foreclosure. In this scenario, you voluntarily surrender the deed to your house to the bank, and in return, they agree not to proceed with a foreclosure. However, this option is typically viable if your house’s value is roughly equal to the outstanding mortgage amount. If the property’s value falls short, the bank may pursue the remaining difference. It’s a solution that hinges on the property’s valuation in relation to the mortgage debt.
5. File for bankruptcy. In some ways, a bankruptcy is far more dramatic than a foreclosure because it impacts your whole life. However, once you file for bankruptcy, the foreclosure process has to stop so it’s still a foreclosure prevention measure.
If you find yourself uncertain about which course of action to take, consider this: If you have the financial means to make payments and your goal is to remain in the house, opting for a foreclosure workout arrangement (#2) is likely your most suitable option.
If your goal is to put everything behind you and move forward in life, a viable option is selling your home and using the proceeds to pay off your mortgage. This approach allows for a fresh start by resolving the financial obligations tied to the property.