American homeowners in Columbia, SC were given the opportunity to pause their mortgage payments because of the financial implications of the pandemic, however that relief will soon come to an end.
Over the course of the pandemic, about 3 million people have fallen behind on their mortgage payments – the highest number since the Great Recession, according to the Consumer Financial Protection Bureau. About 2 million are in forbearance plans, which should provide some relief for a year or more, but many are beginning to exit these arrangements. Those who are unable to resume payments or reach some other agreement with their lender may be forced to leave their homes through sale or foreclosure.
Experts say that those who are in forbearance should start making plans as soon as possible in order to avoid foreclosure – whether that means resuming payments as usual, tweaking the terms of their loans, or leaving their homes.
Here’s how you can avoid foreclosure:
- Reach out to your lender as soon as possible! You might be able to reach an agreement on a payment plan with your lender, if you’re upfront about your situation. A payment plan will allow you to work out a way to catch up on overdue payments, without further straining your finances. You could also ask for a forbearance, which would allow you to temporarily make lower mortgage payments or pause them altogether. It’s important that you reach out to your lender as soon as possible – preferably before you start missing payments. If the lender is annoyed with you for missing payments already, they may be harder to negotiate with.
- File for bankruptcy. You can seek either Chapter 7 bankruptcy or Chapter 13 bankruptcy. Chapter 7 bankruptcy wipes out most or even all of your debts, delaying a foreclosure. Meanwhile, Chapter 13 bankruptcy creates a repayment plan for your debts, allowing you the chance to catch up on overdue payments and keep your home. Choosing to declare bankruptcy can have hugely detrimental consequences on both your finances and creditworthiness, though, so think carefully before you do. It may be hard to come back from.
- Agree to a deed in lieu of foreclosure. This is where you hand over your house to the lender in order to avoid foreclosure
How to get help with foreclosure
- Seek legal advice – find a foreclosure attorney in Columbia, SC who can help you to understand your legal rights in this situation. Depending on your circumstances, you may even be entitled to free legal aid. An attorney can even potentially find a legal defense that could help you to avoid foreclosure on your home altogether
- Seek help from a non-profit in Columbia, SC or government agency such as:
- HOPE NOW – this is a coalition who work to prevent foreclosures
- Homeownership Preservation Foundation, who assist financially troubled homeowners
- Making Home Affordable program, a government initiative that provides mortgage help.
- NeighborWorks America, a nationwide network of nonprofits.
- National Foundation for Credit Counseling, an umbrella organization for financial counseling agencies across the U.S.
- A foreclosure prevention counseling agency in your Columbia, SC
- Federal Housing Administration National Servicing Center, which assists homeowners who have FHA mortgages.
If you’ve considered all of these options and none of them appeal, you can always sell your home! Rather than waiting until your home is seized, you may be able to sell it and use the funds accrued to cover your mortgage debt. If you’re wondering “but how can I sell my house fast enough to avoid foreclosure?”, look no further…
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