Avoiding Foreclosure Means You Taking Drastic Measures
Working to Avoid Foreclosure
There are some possibilities in negotiation and making adjustments to your mortgage agreements with your lender. Lenders do not want homes on their hands that they must sell. They do not want bad loans hurting their businesses. The government wants people to stay in their homes and there are government programs such as the Make Home Affordable program that has been introduced as part of Obama’s new stimulus package that may be of assistance if you are in or near foreclosure.
But if your home mortgage is in default and you have been served notice of foreclosure the most effective way to resolve the situation is to get serious about finding additional cash to clear your outstanding payments. The more you are in arrears the harder it will be to catch up, however, catching up is possible.
- Look at your finances. Where can you cut corners and where can you find more income, a 2nd job like bar work for example? What can you do without and what can you sell or return? Be ruthless if you want to save your home. Your home should be near the top of your list of things to pay, right after food and health care. Everything else can wait, including Internet service, cable TV, dining out, second and third vehicles, credit cards and other debt. If you are about to lose your home your credit rating is already in the tank, so it doesn’t matter if you let other things slide. Losing cable TV will not hurt your family; losing the home will hurt them and take you a longer time to recover from.
- The time to reconsider expenses and your finances is at the first moment you realize you cannot pay everything, not when you get your sheriff’s eviction notice. Do not delay in addressing this serious problem. Take a look at stock market investing software to see how much risk you can take on in your portfolio in these hard times.
- Talk with your lender. See if there are programs, government sponsored or otherwise, that you can use or if payments could be delayed to the end of your contract. Locate your loan documents and read the fine print regarding foreclosure procedures. Look up your state laws so you know where you stand and a time-line. Check with non-profit government agencies that may be able to help you, like HUD (US Dept of Housing & Urban Development) or other housing counselors. Maybe you can do a short sale and get out of your mortgage and then start over.
- Know the law regarding foreclosure. In most situations you have to be at least three months behind on your mortgage before the lender takes action. Then you have more time until the sheriff seizes the property for public auction. Even if your home is foreclosed upon and sold at auction there is a recovery period during which time you can reclaim your home if you can get caught up on the payments.
- Do not get caught up in any housing recovery scams and do not sign anything you do not thoroughly understand.
