In order to stop foreclosure in Wyoming effectively, homeowners need to be aware of all relevant statutes and procedures related to foreclosure law in the state, as well as about currently used alternatives to foreclosure. Lenders in the state of Wyoming use both mortgages and deeds of trust to secure real estate property loans, which often include power of sale provisions in these agreements. Wyoming foreclosure laws do permit both judicial and non-judicial foreclosure, otherwise known as power of sale foreclosure, which ultimately means many lenders will opt for the more cost-efficient method of non-judicial foreclosure. In Wyoming, a foreclosure process can be completed in as few as ninety days, if uncontested, which means a homeowner faces an uphill battle once default occurs.
Contact Your Lender before Default Occurs
Lenders are often the best source of foreclosure alternatives for homeowners, as they are the ones that will initiate and process foreclosure actions. This being said, lenders stand to benefit more from a homeowner paying out a home loan over the course of its lifetime, rather than retaining a property through foreclosure. For this reason, many lenders are willing to offer the following alternatives to foreclosure to their homeowner clients, including:
- Loan modification, which will adjust the terms of an existing mortgage or deed of trust agreement in a manner that makes meeting payment obligations more manageable for homeowners in both the short and long-term
- Loan refinancing, which will remove a homeowner from an existing mortgage or deed of trust agreement and place the homeowner into an entirely new home loan agreement, ideally one with more favorable terms and conditions
- Forbearance periods, which if offered by a lender, will allow a homeowner to forgo making payments on an existing home loan for a pre-determined period of time, with the unpaid amounts being built back into the life of the loan over time
Consult with Government Counselors on Foreclosure Alternatives
Aside from your lender and a lawyer, government sponsored counselors at the local offices of the U.S. Department of Housing and Urban Development provide free homeowner counseling in all fifty states, including Wyoming. Homeowners can consult with these counselors about a number of foreclosure alternatives, as well as determine their eligibility for certain federal foreclosure crisis relief programs and any applicable state of Wyoming programs, as well. Some of the most beneficial of these federal foreclosure relief programs and laws include:
- The Homeowner Affordability and Stability Plan, which is program of federal incentives offered to lenders that promotes lenders offering homeowners favorable terms and rates when refinancing a high interest, variable rate mortgage loan
- The HOPE for Homeowners Act of 2008, which provides incentives to lenders to promote the offering to homeowners burdened by high interest rate, variable rate mortgage loans modifications and other adjustments to fixed, lower interest rates
- The Mortgage Forgiveness and Debt Relief Act of 2007, which makes forgiven debts related to mortgages in default or facing default as non-taxable income, which it previously was before the passage of the act
Look into Selling Your Home as a Foreclosure Alternative
Another method of preventing foreclosure takes the form of selling one’s existing home as a means of obtaining the capital to pay off an existing mortgage debt obligation. If a home has sufficient value versus the overall amount of mortgage loan debts attached to the home, a homeowner may be able to sell their residence, while paying off an unmanageable mortgage or deed of trust loan. In cases where sufficient equity is not in a home to cover all outstanding home loan debts, homeowners may be able to consult with their lender about the following options, including:
- Deed in Lieu of Foreclosure, which allows a homeowner to turn over the deed or title of their home to a lender, while a lender exchanges by cancelling out all outstanding debts related to a given property
- Short Sale, which occurs when a home is sold to a third party buyer at a pre-arranged price, approved by the lender. The lender then takes the income derived from the sale in order to satisfy outstanding debts, and any debt left short and unpaid is forgiven by the lender
Consider Bankruptcy as an Alternative to Foreclosure
One final set of options to prevent foreclosure includes Chapter 7 and Chapter 13 bankruptcy. Both chapters of bankruptcy, if a homeowner is eligible, could provide the following means of preventing foreclosure:
- Chapter 7: When filing for Chapter 7 bankruptcy, a homeowner will be afforded protections from foreclosure actions under automatic stay laws, which prevent creditor collection attempts until the bankruptcy process is complete. In addition, if approved to file for Chapter 7, a homeowner will be able to discharge debts related to a home loan, but at the cost of having to liquidate the assets held in the property, as well as the home itself. Exemptions applicable to the state of Wyoming concerning liquidation of primary residences allow homeowners to retain real property up to $10,00 0 in value, which is doubled for joint filers
- Chapter 13: Under Chapter 13 bankruptcy laws, homeowners are once again afforded protections under automatic stay statutes. In addition, a homeowner’s debts and assets will come under the control of a court-appointed bankruptcy trustee, who alongside your attorney, will negotiate down existing debts, while formulating a consolidated monthly payment that a homeowner will owe, in order for them to keep their home and other assets
Getting Legal Help to Stop a Foreclosure in Wyoming
Having the guidance and representation of an attorney is crucial to any foreclosure prevention action taken by homeowners. In order to obtain any form of favorable outcome to their foreclosure prevention actions, homeowners should consult with a lawyer and use a lawyer’s representation in any tactic employed to stop a foreclosure.
