By working together, your lender may be able to provide you with options to avoid foreclosure. If you are struggling to make your loan payment, here are some foreclosure alternatives that may be available to you:
Other Sources of Payment Your checking and savings accounts are not your only sources of payment. You can take a hardship withdrawal from your 401K, you can sell stocks or bonds you may own, or you can take the cash value of any life insurance policy. Before you use any of these other alternatives, make sure you understand the tax implications and penalties that may result.
Forbearance Your lender may be able to provide you a short-term postponement of your payments if you are facing a temporary hardship case.
Modification Depending on the severity of your hardship, your lender may be able to modify your loan terms to help get you back on track by giving you an affordable monthly payment.
Refinance Your lender may be able to extend additional credit to help consolidate your mortgage and other credit union obligations.
Short Sale Depending on your situation, if you owe more than your home is worth you may be able to sell your home for less than the loan balance through a 'short sale.'
Deed-in-Lieu After your lender has considered all other options and if your home is free of other loans, liens or judgments, you may be able to qualify for a deed-in-lieu. A deed-in-lieu is where you voluntarily transfer ownership back to your lender.
Source: Fairwinds Credit Union
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