No one in Minnesota can predict the future. For example, when a person buys a home, they do so believing they will be able to make their mortgage payments on time and in full until the house is paid off. However, sometimes unexpected financial events take place that make paying one’s mortgage difficult, if not impossible. For example, a person could rack up significant expenses in another area of their life, such as medical expenses. Or, a person could lose their job leaving them without a source of income.
When a person misses mortgage payments, they may find themselves facing the threat of foreclosure. This can be very intimidating, and a person may believe that there is no way out and they will lose their home. However, there may be ways homeowners in such situations can work with their lender to avoid foreclosure.
One alternative to foreclosure is to obtain a special forbearance. This is a repayment plan the homeowner establishes with their lender that allows the homeowner to have their mortgage payments temporarily reduced or suspended.
Another alternative to foreclosure is to obtain a mortgage modification. Through a mortgage modification, the homeowner can have their loan refinanced or extended. This, in turn, would lower the homeowner’s monthly mortgage payments.
A third alternative to foreclosure is a partial claim. In a partial claim, the homeowner works with their lender to make up their missed mortgage payments through a single payment from the Federal Housing Administration – Insurance fund.
These are some options that would allow a person to avoid foreclosure and keep their home. However, this brief overview of this real estate topic cannot be used as the basis for any legal action. Since each homeowner’s situation is unique, those who are facing foreclosure and want to know if there is any way they can save their home may want to seek professional legal advice.
Source: FindLaw, “Alternatives to Foreclosure,” accessed Feb. 11, 2018