Negotiating to Stay in Your Home After Foreclosure

A foreclosure remains on your credit score for at least seven years. In addition to losing your home and damaging your credit, lenders may also have the right to seek a judgment forcing you to repay the difference between the sale price and amount you owe on the loan. Homeowners in danger of foreclosure should communicate with their lenders to reach a solution. After foreclosure, negotiating with the bank can be more of a challenge.

Step 1

Learn your rights as a homeowner. Many states have laws that allow homeowners a chance to purchase back their homes after a foreclosure. The redemption period allows you extra time to gather the funds needed to pay the past due loan balance plus fees. During this time, you are not required to leave the home. In some states, the redemption period is up to a year. U.S. Department of Housing and Urban Development-approved foreclosure prevention counselors are available to answer any questions you have about foreclosure laws in your state.

Step 2

Contact your bank to find out whether the home was sold in an auction. If a private party purchased the home, the party will likely evict you from the home once the redemption period expires. When a home does not sell, the lender regains ownership of the home. If your bank owns the property, you can discuss renting the home. Keep in mind most banks are anxious to recoup the loss by selling the home and may be unwilling to rent back to the former owner.

Step 3

Find out whether your home is backed by Freddie Mac or Fannie Mae. Both government-supported agencies often guarantee Federal Housing Administration loans. Freddie Mac and Fannie Mae both offer programs that can help homeowners remain in their homes. To find out who owns your loan, visit the Freddie Mac or Fannie Mae website to search your property.

Step 4

Inquire about Freddie Mac’s Rental Initiative or Fannie Mae’s Deed-for-Lease programs. Both enterprises offer programs that allow you to rent your home. To qualify for the Fannie Mae Deed-for-Lease program, you will need to sign your deed to the bank in exchange for a lease agreement allowing you to rent the home for up to 12 months. Freddie Mac’s Rental Initiative program allows former owners to lease the home on a month-to-month basis.

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