Avoiding foreclosure if you have lost your job is oftentimes difficult and even impossible for many. The options available to you become fewer and in many cases, the only option left is letting your house go into foreclosure.
If your spouse has a stable job and if your prospects of getting back into the work place in a few months are strong, your chances of saving your house from foreclosure are strong.
There are now an increasing number of banks who are considering giving newly laid-off workers about 3 to 6 months relief from monthly payments as these workers look for a job.
If you can show your lender that your finances are not beyond repair, that your spouse is still working and that your employment record indicates that your skills are in demand, your lender may decide to give you a chance to save your house and may delay foreclosure proceedings.
Bank of America, for instance, has started helping responsible borrowers who have just lost their jobs. It has been extending temporary loan forgiveness for 3 to 6 months to borrowers who can show they can find another job in just a few months.
In addition, the prospect of avoiding foreclosure now for the unemployed is getting a boost from proposals from various sectors about providing temporary financial loan assistance to borrowers who have lost their jobs.
One proposal came from analysts of the Federal Reserve Bank of Boston who conducted studies on the federal foreclosure prevention program. The analysts contended that the program should change its focus from modifying loans to providing loans to qualified borrowers to help them make their monthly loan payments as they look for another job.
If the loans or grants can be given with a repayment period of one to two years, it would help a lot of currently unemployed homeowners who have exhausted their savings to make their monthly loan payments.
Unfortunately for homeowners who have not found work after several months of job hunting, whose spouses are not working or have also lost their jobs and whose loan amounts have increased far above the value of their homes because they took out interest-only loans, the only option to avoid foreclosure may be short sale.
Short selling as a strategy for avoiding foreclosure has been carried out by many distressed homeowners even before the economic downturn. Before embarking on a short sale, make sure that your lender accepts the home sales proceeds as full payment of your delinquent home loan.