How to Stop a Foreclosure in California and Not Be Bankrupt

Bankruptcy prevents foreclosure for some homeowners in California, but will destroy a credit score by remaining on the report for at least seven years. There are several alternate routes you can take to stop foreclosure and save your home without ruining your credit. In California, the average foreclosure process takes four months. To prevent foreclosure, you will need to act immediately. At the first sign of a struggle to meet your monthly mortgage payment, seek assistance.

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  Call your lender. Your lender will be able to offer you affordable solutions to your mortgage dilemma. California lenders realize that in a sluggish housing market, it is more beneficial to allow you to remain in your home and continue paying the loan than to foreclosure. Discuss refinancing the loan at a lower interest rate to lower your monthly payment. The Making Home Affordable program offers refinancing and loan modifications. If your California lender participates in the Home Affordable Foreclosure Alternative program, you may be eligible to receive money for selling the home in a short sale or giving back ownership with a deed-in-lieu of foreclosure. Even though your credit score may be affected, the impact will not be as severe as bankruptcy.

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  Apply for assistance through a California foreclosure prevention program. The Keep Your Home program is implemented by the California Housing Finance Agency. Since California is one of the states hit the hardest in the foreclosure crisis, additional money is awarded by the federal government to fight foreclosure. The program provides services such as counseling and financial assistance to homeowners in need.

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  Seek legal aid. Pro bono attorneys in California volunteer their services to help homeowners stop foreclosure without having to file bankruptcy. An attorney can offer legal advise and representation. Assistance is typically available to low and moderate income homeowners. The attorney can also review your mortgage documents to determine if you are a victim of lender fraud. Law Help California is a site that helps locate legal aid service providers near you. You can also refer to HUD for local legal aid contact information.