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Strategies for avoiding foreclosure in Washington, D.C.

Many people face the specter of possible foreclosure and do not know what to do in order to try to stop the action. When people want to stop a foreclosure, there are several things that they can do. The first step in trying to avoid a foreclosure is talking with the lender or servicer of the loan as soon as a person knows that their mortgage payment will either be late or that it will go unpaid. When entering into the discussion, people should be aware of several available options.

Lenders may be willing to agree to a loan modification in which they reduce the interest rate to assist the borrower in making the payments. Others may agree to a repayment plan for the missed payment in addition to continued compliance with the regular payment. A reinstatement, in which the borrower brings the loan current, may be negotiated as well.

Lenders may also be willing to grant a temporary forbearance on the loan. Private mortgage insurers may be willing to give a cash advance to the borrower to bring the loan current, and if the homeowner is in a disaster area, the foreclosure proceedings may be delayed. If the loan was backed by the VA, the VA may agree to buy the loan from the lender and take over its servicing.

While there are several options available for foreclosure avoidance, not everyone will be successful through negotiating with their lender or servicer. Another possible option is considering filing a Chapter 13 bankruptcy. People may wish to consult with a bankruptcy attorney about foreclosure defense assistance.

Source: RealtyTrac, "Stopping a Home Foreclosure", November 30, 2014

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