Question:

How to refinance a mortgage if facing a foreclosure?

Answer:

If your mortgage is getting out of control due to events you had no control of - lost your job, went through a divorce, had an accident, you might be thinking of how to refinance a mortgage and avoid foreclosure.

However, it will be in your best interest to first try to work things out with your lender, as they will not like to have to foreclose at a loss on yet another property and may be able to refinance your mortgage. The reason lenders may be willing to cooperate with you now more willingly than ever is the intimidating number of borrowers facing foreclosure. The high foreclosure rates make it tough for lenders to get back their money, and even more so when they have to sell properties at a loss.

If you talk to your lender, they may very well be willing to refinance your mortgage to new affordable rates. If you have tried to work it out with your lender but they were indifferent, and you can't find another lender to refinance your mortgage with, you may better surrender your deed to the lender, making sure you kept all evidence (correspondence with lender) showing you were trying to cooperate.

Sometimes even refinancing the mortgage will not help you avoid foreclosure on the property and if home values have declined, your lender may agree to a short sale. That is, a lender will allow you to sell your house at $200,000, while you currently owe $250,000, and take it as a payoff.

Mortgage rates hit their lowest since 1955. Ask the home loan experts we recommend Quicken Loans how to take advantage of them.
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