How to prevent foreclosure - Borrow funds from a relative

Borrowing funds from a relative may be the perfect solution to prevent foreclosure on your property. This is a relatively simple, but often overlooked solution to avoid foreclosure.  Let  face it, foreclosure is a serious problem, and you need help.  If a family member is willing to lend money to prevent foreclosure, it may be the best solution.

To keep peace in the family, the deal must be structured correctly to avoid misunderstanding and protect both parties.  I would recommend that the family member making the loan obtain a signed note and record the debt with the County recorder.  An escrow company or attorney can assist with the process.

Prevent foreclosure, but what about the negative equity?

If you do not have any equity because you owe more than the property is worth, we do not recommend borrowing funds from a relative because you are essentially using your relative’s money to bail out the bank’s problem - and there are other and better options open to you to avoid foreclosure.