What Are The Options For Someone In Foreclosure in Ruston, or North Louisiana?

Facing foreclosure can feel overwhelming, but you have more options than you might think to regain control of your situation. Some solutions focus on helping you stay in your home, while others provide ways to sell it with fewer obstacles, and get some relief from the overwhelm of the payments and scary letters from the lender. Many of these options give the homeowner more flexibility for if, or when they decide to move out of the home.

Why Foreclosure Happens

When multiple mortgage payments are missed in a row, lenders initiate foreclosure, which can eventually result in selling your home to recover the loan.

Foreclosure impacts your credit for years, making future borrowing challenging. However, if you take action before the foreclosure process is complete, you have several options that could stop it and allow you to move forward.

Option 1: Catch Up on Payments

If you want to keep your home, catching up on your missed payments is the most obvious solution. But probably one of the more difficult ones, so trust us when we say we understand.

Most people's first thought is, "I want to stay in my home." so this is listed as an option, in the case that the homeowner has the financial circumstances to catch up on payments.

Many lenders are open to working with homeowners who wish to bring their loan current, particularly if your financial hardship was temporary.

If this doesn't seem like the right option for you, there are many more options listed below.

Ways to Catch Up on Payments:

1. Repayment Plan: Some lenders offer repayment plans that let you spread the overdue amount over several months by adding a portion to your regular monthly payment.

2. Lump-Sum Payment: If you have access to enough funds—through savings or possibly a loan from family —paying the full overdue amount in a lump sum can bring your loan current and stop the foreclosure process.

3. Forbearance Agreement: This allows for a temporary pause on payments, after which you can follow a repayment plan. Forbearance provides breathing room to regain financial stability before resuming regular payments.

If you’ve recently stabilized your finances and want to avoid moving, talk to your lender as soon as possible, as they’re often more flexible early in the foreclosure process.

Option 2: Loan Modification

A loan modification can change the terms of your mortgage, such as lowering your interest rate or extending your loan term, to reduce your monthly payment. This option is ideal for those facing long-term financial challenges who can make payments with a bit more breathing room. To qualify, you’ll need to demonstrate that you’re experiencing financial hardship but can afford the modified payment terms.

Option 3: Refinancing

Refinancing allows you to replace your existing loan with a new one—often with a lower interest rate or extended term. Refinancing can be difficult if you’re already behind on payments or have poor credit, but some lenders offer “hardship refinance” programs for borrowers in these circumstances. This option is best if you have equity in your home and are just beginning to experience financial challenges.

Option 4: Forbearance

If you’re experiencing a temporary hardship (such as job loss or medical expenses), forbearance allows you to pause payments for a set period. After the forbearance period, you’ll typically need to either repay the paused amount over time or follow a repayment plan. This option is helpful if you expect to be financially stable again within a few months.

Option 5: Bankruptcy

Bankruptcy can temporarily halt the foreclosure process, giving you time to consider your next steps. Filing for Chapter 13 bankruptcy allows you to restructure your debts, including past-due mortgage payments, into a manageable repayment plan, often allowing you to catch up on payments over a longer period. Chapter 7 bankruptcy can also provide temporary relief, although it doesn’t allow for a repayment plan and may require the sale of certain assets.

Bankruptcy is a significant decision that impacts your credit for several years, so it’s typically considered when other options aren’t viable. However, it can offer temporary legal protection from foreclosure and may allow you to stay in your home while reorganizing your finances.

Click HERE to Read More About What Bankruptsy Is And How It Can Help Stop Foreclosure

Option 6: List the House with a Realtor

Listing the house with a realtor is a traditional option that allows homeowners to sell their property on the open market to pay off the mortgage and avoid foreclosure. A real estate agent can help market the home, negotiate offers, and guide you through the selling process, potentially attracting more buyers willing to pay market value.

Pros: Potential to sell at market price, professional guidance, wider exposure to buyers.

Cons: Time-sensitive; if the house doesn’t sell quickly, foreclosure may still proceed. Additionally, agent commissions and closing costs may reduce the proceeds from the sale. Oftentimes on market buyers ask to have repairs made, which is not ideal in a foreclosure situation. Your realtor or agent can specify that the sale is as-is, however this may limit your buyers if the home needs significant repairs.

Option 7: Subject To

A "subject to" sale involves selling the property to a buyer while the existing mortgage remains in place. The buyer takes over the payments “subject to” the existing loan terms.

A subject to sale helps keep a foreclosure off of your credit, as well as helps rebuild your credit as the loan payments are made. This strategy may also allow the value of the home to be leveraged in order to get the homeowner some cash to get back on their feet. This may not always be possible, but can be a benefit of creative solutions like subject to.

A "subject to" sale often uses a third-party servicing company to manage payments, which provides proof of payment and may help remove the mortgage from your debt-to-income ratio. If the buyer stops paying, you would have the legal right to reclaim the property, often through a quit claim deed. This is a very simple process often done at the local courthouse.

Speed is a great factor in subject to sales as well, typically a subject to sell can be closed within 7-10 days similarly to a cash sale, allowing the homeowner to find the relief they need faster.

Subject to, short sale, and cash buyers are usually investors who are familiar with foreclosure.

Click HERE to read more about what SUBJECT TO is, and how it can help stop foreclosure.

Option 8: Short Sale

A short sale allows you to sell the home for less than the outstanding mortgage balance with lender approval. The lender may accept this amount to avoid the cost of full foreclosure, especially if you have minimal or no equity in your property. Short sales require the lender’s approval and can take longer to process, but they may allow you to avoid foreclosure with a smaller impact on your credit.

Just Jolly Investments does not make short sale offers or negotiate with lenders. The information provided about short sales is for informational purposes only and is intended to educate homeowners about all possible options to stop a foreclosure. Homeowners are encouraged to consult with qualified professionals for guidance specific to their situation.

Option 9: Selling for Cash

Selling your home for cash is one of the fastest ways to avoid foreclosure. Cash buyers don’t rely on mortgage approvals or appraisals, which speeds up the process significantly. In addition, cash buyers usually purchase homes as-is, so you won’t need to worry about repairs or showings.

Click HERE to read more about how cash sales work, and the benefits of selling your home for cash in Ruston, or another area in North Louisiana.

Why a Cash Offer Is Simple:

- Quick Closing: Cash sales can close within days or weeks, helping you avoid the foreclosure process.

- As-Is Condition: You can sell without spending on repairs or updates.

- Relieves Financial Stress: A cash offer can help you pay off your remaining mortgage, stop foreclosure, and protect your credit.

If you’re facing a tight foreclosure timeline, a cash sale provides a guaranteed sale, giving you financial relief and a chance for a fresh start.

Understanding the Foreclosure Timeline

Foreclosure timelines vary by state, but here’s a general overview:

1. Missed Payments: After missing one or two payments, the lender may begin contacting you about the delinquency, providing an opportunity to catch up or reach out for help.

2. Pre-Foreclosure Notice: After several missed payments (usually three to six months), the lender will issue a Notice of Default, formally notifying you of their intent to foreclose if the debt is not resolved. This stage still allows flexibility to explore solutions.

3. Foreclosure Filing: If no action is taken, the lender may file for foreclosure, with the timing to auction varying by state, usually between a few months to over a year.

4. Foreclosure Sale Date: A sale date is set, but options like selling the home quickly or negotiating with the lender are still possible up until this point.

Each stage allows for different intervention options, and the earlier you take action, the more choices you’ll have. The closer to auction, the fewer options remain, so it’s best to act early if possible.

How Just Jolly Investments Can Help

At Just Jolly Investments, we understand the stress that comes with foreclosure, and we’re here to help.

We can provide a fast, no-obligation offer if you decide to sell, or discuss other options.

If you’re looking for professional guidance we can also connect you with realtors, bankruptcy attorneys, and other experts who can assist.

Don’t wait until foreclosure is at your doorstep. Reach out to us, and let’s find a solution that works for you. Our goal is to make this process as smooth as possible, giving you peace of mind and a path forward. If you're ready to take the first step, fill out the offer form on our website, or give us a call today!