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Homeowners don't have to just accept foreclosure

Buying a home is often a rite of passage for many Texas residents. After all, it is part of the American dream. Right? The problem is that when a homeowner encounters financial difficulties, his or her mortgage loan lender may begin foreclosure proceedings for nonpayment.

Should a Texas homeowner simply accept this fate? It is not always necessary to do so. If he or she wants to keep the home, or otherwise avoid a negative mark on his or her credit, an alternative may be possible. Whether any of those alternatives will yield results depends on the particulars of the situation.

Requesting a modification to the mortgage loan could help make the payments manageable. If the circumstances warrant it, the lender may agree to suspend payments for a specified amount of time. It will be necessary to bring the loan current at some point. In the alternative, it may be possible to receive help from the Federal Housing Administration insurance fund to bring the mortgage current if the financial situation improves and full payments can resume.

If keeping the home does not make financial sense, it may be possible to sell it before the foreclosure goes through. A homeowner may also be able to simply give the home to the bank through a deed in lieu of foreclosure. If it makes sense to do so, he or she could also file for either Chapter 7 or Chapter 13 bankruptcy.

Determining which course of action would make the most sense for a particular homeowner often requires some research. It would be a natural response to panic and grasp onto the first solution presented, but that could make the situation worse, especially if the financial difficulties that led to the situation are not resolved. Instead, slow down and take the time to make the choice that produces the best possible results.

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