Homeowners of distressed real estate can explore several options to stop foreclosure from happening. They should always remember that a foreclosure can hurt their future chances of getting another home and acquiring another mortgage. It will also affect their credit scores negatively which is why preventing foreclosure instead of walking away from it is still the better option.
What Can Be Done?
Owners of residences who are facing foreclosures are provided with a certain period of time to find another way to prevent it from happening and they should take advantage of this period to work on a solution. One option that is available is offering the property for a short sale. Although this would still mean that the property will be sold off and the owner has to let it go, it is still way better than a foreclosure.
Short sale is the process wherein the lender will allow the home to be sold at a price that is less than what is owed by the homeowner. This can help end the homeowner's problem of trying to pay for a distressed real estate when it is obvious that he does not have the capacity to do so anymore. Moreover, it will not reflect badly on his credit history if the property went through a short sale instead of a foreclosure.
Another option that a homeowner can explore is selling the property to a buyer through a pre foreclosure sale. Although finding a buyer who is willing to purchase the home at a price that is less than the usual short sale rate, there are still homeowners who were able to find such deals. This leaves them with enough money to pay for the loan and in some cases, even have a bit of extra left.
Why Walking Away Is Not an Option
Some homeowners decide to walk away from their properties instead of paying for the loans or exploring another option. They allow their houses to get foreclosed, thinking that once this is done, that would be the end of their troubles. However, owners of distressed real estate should never assume that this would be the end of it since some states in the U.S. allow lenders to sue a homeowner if the amount they get from selling the foreclosed property is less than the amount owed to them.