If an Ohio home owner's financial situation deteriorates to a level at which mortgage obligations can no longer be met, there are steps that can be taken to remedy the situation. Facing foreclosure is naturally stressful, and all options must be considered. Support is available from different sources, including foreclosure prevention counselors, the mortgage holder, the government and the bankruptcy court.
Although selling the house may be the best solution, the mortgage holder will remain responsible for the balance if the property's value is lower than the mortgage amount. Foreclosure prevention counselors can assess the situation and determine whether a refinance plan or loan modification is possible and offer to negotiate with lenders. However, the mortgage holder will be exposed to the many scammers that exist in this field. Lenders are sometimes willing to accommodate borrowers by temporary reduction or suspension of mortgage payments, loan modifications, refinancing or reinstatement that will allow the payment of missed installments.
The help offered by the U.S. government involves loan modification or refinancing. The Making Home Affordable program is aimed at qualifying property owners whose homes are worth less than their mortgages. Another option is to offer the deed to the home to the lender in an effort to exchange the deed for the cancellation of the mortgage debt, but that will not help to keep the property owner in the home.
One other option for Ohio homeowners is filing for personal bankruptcy. Even if a foreclosure action has been initiated, bankruptcy may temporarily delay the process. All debt collection actions are stopped by the automatic stay that becomes effective upon a bankruptcy filing. This may provide the borrower the necessary time to regain control of the mortgage payments. An experienced bankruptcy attorney can provide guidance throughout the bankruptcy proceedings that follows a bankruptcy filing.
Source: FindLaw, "How to Avoid Foreclosure", Accessed on Jan. 23, 2016