Housing Counseling

Avoid Foreclosure

Equity Skimming or Leasebacks

One of the less scrupulous methods for “helping” homeowners stay in their homes is equity skimming or leaseback programs. The individual offering to help you out will offer to catch you up on your payments and take them over for a period of time while you continue to “rent” the home.

The contract, however, usually contains strict provisions so that if you are one day late with your monthly payment, for example, the home is no longer yours. Or you may have actually signed over your home to that buyer with the opportunity to buy it back at terms you’ll never be able to afford. Either way, you lose..

Be very careful if someone offers you an easy way out of your foreclosure situation. When you are in foreclosure, you’re a high-risk borrower. Your lender won’t let you off the hook easily, why would someone else?

A Note About Quitclaims: You can quitclaim your ownership in a property by signing a legal document turning your rights over to someone else. This does not get you off the hook with the lender. It just leaves you with no rights to the property. Do not quitclaim your property if you cannot get an attorney to look over the documents for you.

Deed in Lieu of Forclosure

With a deed-in-lieu, you basically give the lender back the home. By doing so, you may minimize the foreclosure expenses. But your credit report will likely say “deed in lieu of foreclosure” which is pretty much as negative as a foreclosure.

Bankruptcy

In some states and in some situations, filing for bankruptcy can delay or stop the foreclosure process. Since bankruptcy laws vary from state to state, it’s a good idea to talk with an attorney as soon as possible if you think you may need to go this route.