If you are experiencing financial hardships and find yourself unable to make your mortgage payments, you may be facing foreclosure. A sheriff's sale is the final step in the foreclosure process, whereby you are evicted and your home is sold at public auction. A sheriff's sale can be stopped; however, it will take some work on your part. You will need to hire an attorney and properly communicate with the right people to halt legal actions against you.
Contact your lender immediately. Depending on which stage of the process your case is at, it's quite possible to discuss with your lender or its attorney, alternative methods of resolution to your situation. If you've been communicating with your bank throughout the process, this may be a possibility. If you've ignored letters, phone calls and other communicative attempts, they may not be as willing to negotiate. Contact an attorney to help you.
Pay your back payments off in cash. You may lack the funds to pay your back payments, but your lender may be willing to reduce the amount you owe in arrears in exchange for an immediate cash offer, and roll the difference back into your loan. Ask your lender to provide you with a report indicating the total of your arrears including interest, penalties and legal fees. Make them an offer if you have the funds. If this is not possible, you will need to renegotiate a suitable agreement.
Attempt to renegotiate. After meeting with your attorney, construct a payment arrangement to satisfy your arrears. Have your lawyer contact the lender on your behalf and present them with your proposal. If they accept, get a written agreement and begin paying your back payments. During this time, the sheriff's sale will be postponed but could be back on the table if you default on the agreement. If your lender balks or counters with an unfavorable deal, you must seek other alternatives.
Restructure your loan. Banks, ultimately, do not favor being in the business of foreclosing on real estate. They make much bigger profits on the financing attached to it. Have your attorney to negotiate with your lender to restructure your current loan into more affordable terms. In today's economy, this is common, as millions of people are unable to afford home loan payments according to their original structures. Don't be picky. Preventing your home from being auctioned off is your goal, not reaping huge savings. If the bank will offer you a deal, the foreclosure process will cease. If not, you must proceed through the channels of possibilities. This would also be a good time to contact a foreclosure avoidance counselor at HUD, or the Department of Housing and Urban Development (see Resources below).
Refinance with another bank. Most likely, you now have a foreclosure on your credit report. A foreclosure, generally, is one of the worst strikes anyone can have against them. However, as banks need revenue, many are willing to refinance home loans for borrowers experiencing hardships. Before you seek new financing, have your attorney contact your lender and request a temporary stay in the foreclosure process while you seek a new bank. Contact a mortgage broker with access to many programs from a variety of lending institutions. Provide your loan officer with detailed letters of explanation regarding your current foreclosure. Have your attorney write them for you to add credibility.
Utilize a short sale. Depending on how quickly the date of your sheriff's sale is approaching, you may be able to stop it buy utilizing a short sale. Have your lawyer request permission to sell your house for less than you owe on the mortgage simply to get the bad debt off bank's books. If they agree, recruit someone you know to buy it and rent it back to you. You may purchase it again at a later time from the new owner.
Turn to your family and friends for help. If you are out of options and the sheriff's sale cannot be stopped using traditional methods, call on your family, friends and church body. Depending on the amount you owe in back payments and on your mortgage, your friends and family may be willing to help you save your house with private loans or gifts.
Be aware of the scheduled date of your sheriff's sale. This will give you an idea of how much time you have to save your home.
Obtain written agreements from your bank if you re-negotiate a payment plan.
Never avoid lender attempts to reach you during the foreclosure process, especially if you wish to save your home.