I know foreclosure is an unpleasant topic but since Tennessee is number 11 nationwide in numbers of foreclosures, it certainly seems like a subject that merits some discussion.

If anyone is behind on their mortgage payments or have maybe received a foreclosure notice, you still have some legal options to solve, prolong, or even fix your financial difficulties.

Here are some ideas to consider:

  1. Restructure your loan. With this option you try to negotiate with your lender to come up with a payment plan to get you caught up and possibly add any late fees and charges to your current loan to soften that burden for now.
  2. Reinstatement. This is simply catching up all your late payments plus associated fees and charges. Since most people facing foreclosure in the first place are having financial problems this is not an option for most.
  3. Refinance your existing loan. If you have a large amount of equity in your home it might be worthwhile to talk with your lender about refinancing your existing loan to get you caught up and hopefully make your payment a bit more bearable.
  4. Sell your home. If your home is in salable condition, maybe selling now to avoid foreclosure and moving to something a bit more affordable until things get better could be a consideration.
  5. Do a short sale. In a short sale your lender agrees to take less than the principal amount of your mortgage if you sell your house. Not surprisingly most lenders are not too excited about this option but since it costs them so much to foreclosure and they usually sell the homes at a loss, a sort sale would be something to run by them.
  6. Give them the deed in lieu of foreclosure. This is actually a “friendly foreclosure” if there is such a thing. You simply sign the house over to the lender and give them the keys. The effect on your credit is the same a a bankruptcy but it could save you from bankruptcy which should always be the final option.
  7. Bankruptcy. This is the most extreme solution and should only be undertaken with good legal guidance and under dire circumstances. This will not stop a foreclosure but merely slow it down for a few months. Trying to negotiate a short sale would be a better option than both this and giving a deed in lieu of foreclosure.

If you’re A Knoxville, Farragut, or Knox County resident and are having any difficulties making your mortgage payments or have maybe even received a notice of foreclosure I would be happy to sit down with you and go over all your options. No cost, no obligation.