Avoiding Foreclosure
It is a subject that is constantly in the news: foreclosure. It is a deep concern of every homeowner who may be having difficulty making mortgage payments.
The stories are often told of homeowners who have suddenly had to contend with unforeseen circumstances such as job loss or medical bills.
Perhaps you don’t even have to look at the news to be aware of foreclosure; you may already know someone who is falling behind on some mortgage payments and has that looming fear. It could be you yourself.
Obviously the best way to avoid foreclosure is to be preemptive. This means you must notify the lender immediately if you know you will not be able to make your payment that month. Don’t let the due date pass by on the calendar without making that phone call. The lender would much rather work with you and negotiate with you than to take over your house. While we are well aware of the consequences of foreclosure to the homeowner, what is often overlooked is that foreclosure is costly to the lender as they become bereft of the interest and principal payments the homeowner had been making, but then they must undergo an expensive and drawn out legal process to take possession of the house.
So do communicate with your lender, the sooner the better. If you are already behind on payments, you compound the problem if you do not respond to the lender’s phone calls or correspondence. Get in communication with them and stress that you want do do what is possible to avoid foreclosure. If you are in a short-term financial crisis or hardship your lender may allow you a few month of deferred payments, perhaps even a temporary forbearance. If your financial crisis has no end in sight, there may still be alternatives. For instance, there are agencies which can counsel you at no cost to you and enable you to devise a plan to solve your problem.
Additional options include the loan modification programs created by the mortgage companies as they cope with the crisis of an unprecedented number of homeowners who have simply defaulted and walked away from their homes. Perhaps you can short sell your home or find a way to preserve your home equity. However, you must exercise caution when dealing with these companies. As you will see in the FTC video below, there are a number of scams. Visit the FTC Web site for more information on foreclosure scams and learn more about real world solutions to help you in avoiding foreclosure.