If your mortgage servicer participates in the Making Home Affordable program, it may be possible for you to avoid foreclosure by obtaining a loan modification through the Home Affordable Modification Program or HAMP. But don't delay in applying. There is a lot of information and documents that you must provide to your servicer, if you are even eligible.
If you qualify, a HAMP loan modification can reduce your interest rate to as low as 2% (gradually increasing to 5%), extend the term of your loan, and possibly even forgive or defer principal, to make your mortgage payments more affordable.
But don't be complacent, particularly if your home is up for foreclosure. We have had clients that before they came in to see us, had been foreclosed on after their mortgage company had told them that they would stop the foreclosure sale. And Texas law says that any agreement regarding real estate, must be in writing, so it's very difficult to "undo" a foreclosure sale in Texas, even if the mortgage company lied to you.
So if you are not sure the sale is stopped, it is possible to file chapter 13 bankruptcy to stop the sale. You can still apply for a HAMP loan modification during a bankruptcy. And then you can be sure that the foreclosure sale is stopped. Not sure what to do? Come in and talk to us, and we will give you our best advice.