have exhausted all possible alternatives for getting caught up on your mortgage. These alternatives, detailed in Chapter 3, include restructuring your loan, refinancing to obtain lower payments or interest rate, or asking your lender for forbearance — temporary suspension of your payments to allow your recovery from short- term financial problems. Restructuring or refinancing your mortgage may be challenging. If your finances were difficult enough to cause you to miss your mortgage payments in the first place, those same financial conditions could make it difficult to qualify for a new loan or obtain new terms on the old one. Have you already liquidated any luxury items or unneeded personal property to raise cash — such as a boat, jewelry, a second car, etc. — in an attempt to catch up on your mortgage payments? Is a second job feasible for you or your partner? Assuming you’ve exhausted all these possibilities, selling your home may be your best opportunity to avoid foreclosure. If you can sell your home for enough money to settle your full debt, including back payments and any new fees or penalties, then yes, you will lose your home to the new buyer, but you can avoid the damages foreclosure can have on your credit and your ability to obtain another home loan in the future. If you make the decision to sell, notify your lender as soon as possible, and ask your lender to postpone a foreclosure auction to give you time to find a buyer. The earlier you decide to sell, the more time you will have to make your case to the lender. Be sure to ask the lender how much time you have before your property goes to auction. As a rule, lenders try to avoid foreclosing on a property because it’s a legal hassle, it’s time-consuming, and they may ultimately make less on the foreclosure sale than they would have made by
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