No homeowner wants to face foreclosure and its long-term effects on your finances. Thankfully, loss mitigation tactics can help you avoid this situation.

What is loss mitigation? The team at Cozmyk Law shares the answer in this guide and explains strategies to help you avoid foreclosure. Call our office if you need a foreclosure attorney in Cleveland, OH, to help you navigate the process and protect your assets. 

The Basics of Home Foreclosure in Ohio

Creditors like mortgage lenders, property tax collectors, and homeowners associations can pursue foreclosure if you fail to pay the debts you owe. The process will often start with them sending collection notices and contacting you, though it can evolve into them putting a lien on your property. If they move forward with foreclosure, you risk losing your home in a matter of months. 

Common Forms of Loss Mitigation

What is loss mitigation? This refers to options that creditors, typically mortgage lenders, offer homeowners facing foreclosure to help them avoid the legal implications. Check out some simple ways to prevent foreclosure below. 

Forbearance

Say you’re behind on mortgage payments following job loss. Your lender could agree to a forbearance period which temporarily pauses your monthly payments. This gives you time to bounce back financially and eventually resume payments without penalty. 

Similar tactics include loan modification and repayment plans. Ask your lender to consider these options if you’re behind on payments due to:

• Job loss
• Divorce
• Health issues
• Other financial hardships

Bear in mind that lenders are under no obligation to grant these requests, though it’s worth reaching out to your mortgage company for loan forgiveness during hard times. 

Bankruptcy

Filing for bankruptcy can stop the foreclosure process but you have to carefully decide which route to take. Chapter 7 bankruptcy often ends with liquidating your assets, including your home, whereas Chapter 13 bankruptcy allows you to keep living there and settle your debts over a set number of years. 

Deed in Lieu of Foreclosure

If you’re willing to part ways with your house, consider transferring the deed to your lender. This alleviates you of all the debt you owe them and allows them to sell the house to a new buyer. A deed in lieu of foreclosure is an effective way to avoid the legal process but requires you to vacate your home as soon as possible. 

Short Sale

You can also sell your home to avoid foreclosure. Traditional sales can take a while to complete so many homeowners opt for a short sale. You can sell the house in a matter of days but typically receive less for it than with a traditional sale.

Stop Foreclosure With the Help of a Qualified Attorney – Contact Cozmyk Law for a Consultation

After reading this guide, you no longer have to wonder, “What is loss mitigation and how can it help me avoid foreclosure?” Going through the foreclosure process in Ohio doesn’t have to be a struggle when you have a seasoned legal team on your side. Contact Cozmyk Law at (216) 452-9145 to request a free consultation and work with our attorneys. Learn more today.