If you fail to make a payment on your Massachusetts home, there is a chance that you’ll be subject to foreclosure. This means that the lender will repossess your property in an effort to recoup its losses. Fortunately, there are many strategies that you may be able to use to stop this from happening.
Sell the house
If you have positive equity in your home, you are free to sell it before the foreclosure becomes official. The proceeds from the sale will pay off the outstanding balance, which means that there would be no need to repossess the property. In the event that you don’t have sufficient equity in your home, it may be possible to ask for permission to perform a short sale. In such a scenario, you would sell the home for whatever you can get for it to prevent a foreclosure from happening.
File for bankruptcy
Filing for bankruptcy will typically result in an automatic stay of creditor collection activities. This means that an attempted foreclosure would be postponed until after your case has been heard. In the meantime, it may be possible to negotiate new loan terms or come to some other agreement that would put you back in your lender’s good graces. Chapter 7 cases are generally resolved in a matter of months while a Chapter 13 case can last for up to five years.
Losing a home to foreclosure may mean losing the equity that you have accrued in the property. It could also result in a significant decrease in your credit score. If you don’t think that you can make a mortgage payment on time, it may be best to talk to your lender about ways to avoid having your property repossessed.