Few things in life are as difficult as facing a foreclosure. There are steps you can take to help avoid foreclosure, whether you’re just starting the process or nearing the end.
Keep in touch
Your lender should be the first resource you exercise. Keeping in contact with them is essential. Remember, they would rather have your money than your house; keeping in touch with them and opening all your mail will not only keep you up to date on the foreclosure proceedings, but will demonstrate your willingness to work it out, as will cutting nonessential services like cable and obtaining extra jobs, even if these things won’t help immediately.
Know the details of your mortgage
Pull out your original loan documents and any documentation of changes in your mortgage and reacquaint yourself with them. The U.S. Department of Housing and Urban Development (HUD) makes nationwide housing counseling free or low-cost (you can find a HUD-approved counselor by calling 800-569-4287). These counselors are qualified to help you know the law, your options, reassess your finances to find money to make the required mortgage payments, and represent you in negotiations.
Don’t stop making payments
If you are considering stopping the payments on your mortgage, it’s important to consult with an attorney or CPA first. Know that filing bankruptcy, signing over the title of your home, or even selling it doesn’t always mean that you don’t have to pay—that money was lent to you, not your house, and you are ultimately responsible for it.
Avoid scams
Beware of scams. There are many companies and individuals out there that are taking advantage of desperate homeowners facing foreclosure. As a foreclosure reaches the point where a sale date is determined, a notice is put in the local newspapers, and that means it’s easy finding vulnerable people to target. Individuals or organizations that promise to make the problem go away, use pressure tactics or demand sums of money before doing any work are probably not legitimate. As always, if it sounds too good to be true, it probably is.
Short Sales
If staying in your home simply isn’t an option, a short sale might be the best way to go. A short sale basically means selling your home for a figure less than what you owe. We offer a free 15-page Ebook on short sales to help sort out the details—simply click here to sign up for our newsletter. Or find out what your house is worth by clicking here.
