This document discusses alternative methods for homeowners in Illinois and Michigan facing foreclosure to avoid losing their home. It explains that lenders are generally open to workable solutions like forbearance and reinstatement plans that allow borrowers to pay less than owed or become current on loans to stop foreclosure proceedings. It also describes the FHA Short Refinance program launched by the Federal Housing Administration, which can help non-FHA borrowers with credit over 500 refinance into an FHA-insured mortgage to stop foreclosure while keeping their home rather than selling through short sale. This option may result in paying more long-term but provides economic stability compared to other options that risk home loss.

1. Alternate Methods to Avoid Foreclosure
If you are living in Illinois or Michigan, and facing the issue of foreclosure, you are in a spot of bother. In
this article, we shall take a look at ways to stop foreclosure. The different thing about these methods in
order to stop foreclosure is that they are workable. A family facing the problem of foreclosure is quite
tense and normally fails to find an effective solution in this pressure. The purpose of this article is to
show to you that there exist possible ways to stop foreclosure and save you from the troubles. A key
thing to realize before we discuss methods to stop foreclosure is that the lender is always looking for a
workable solution. As per Illinois and Michigan’s law, a lender can opt for “Forbearance” and
“Reinstatement”. The principle behind these options is to provide an option to the borrower to stop
foreclosure without having to go to the court.
Under these terms, you can pay less money than the actual amount, and cover all previous loans. Once
that is done, the lender sees it as a sign that you are becoming current on the loan, and deems
convenient to stop foreclosure proceedings. These options are also known as “repayment plan”
strategies to stop foreclosure. Another method to stop foreclosure is by taking help of the FHA Short
refinance program. This program has been launched by the Federal Housing Administration to help
borrowers stop foreclosure through a refinancing strategy. An important thing to know is that this
scheme is for non FHA borrowers only.
The reason as to why this is an effective strategy to stop foreclosure is that after this refinancing, your
property becomes FHA insured mortgage. To be eligible for this program, you need to have a credit
rating of 500 or more. As you would notice, this is not a steep demand. In the longer run, you may to
pay more than the actual amount you owe; but it allows you to stop foreclosure and save your credit
rating. Another good thing about this option is that you don’t have to short sell your home. Normally,
people facing foreclosure would short sell their property and consequently lose the ownership. Even if
you opt for a loan based approach, you are better off with this refinancing mode. Through this you are
not only in a position to stop foreclosure but also in an economically stable mode than other options.
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