5 Secret Ways to Avoid the Dreaded Foreclosure

Your home is your castle, and you love it, but unforeseen financial difficulty can cause problems and keep you from making those timely monthly payments. That’s when the bank starts to take your home away, and this can be your worst nightmare.

But stop. Your life isn’t over yet. There are options out there and you can avoid or stop foreclosure if you just follow a certain process. So let’s see what you can do to save your home or at least get out with a decent credit rating.


The Letters

Sure you probably want to avoid the bad news and you leave those letters lying around; try to ignore them and maybe the problem will go away, right? But just because you don’t see another letter in the mail the next day, doesn’t mean the problem has gone away. If you see a foreclosure letter or pre-foreclosure letter in the mail, call your lender. Talk to the Loss Mitigation department if you are having problems making payments. When you explain your situation, the lender may be able to work something out with you. Of course, you’ll need to expect the lender to ask for financial proof of your hardship. You may need to show your monthly income and expenses.


Don’t Move Out Yet

You want to stay in your home as long as possible. So stay there, otherwise you might not qualify for assistance.


Contact a Housing Counselor

There are more than a few housing counselors who have information on programs or services that are available by Government agencies. These are both privately funded or nonprofit organizations and either may have options. However, you should be prepared for the consequences; many of these agencies will require you to use credit counseling.

Hold on. This isn’t the only solution here. You may also have other options.


For example, you might ask for special forbearance or a repayment plan based on your financial hardship. In some cases, a lender might even offer a temporary reduction or even a suspension of payments. If you have recently had a reduction of income or you are experiencing increased living expenses you could qualify for this program.


Loan Modification

If you’ve lived in the home for a length of time, you might be able to ask for a refinance or a loan modification option which will lower your loan payments. This can help you catch up with your past due payments.


Pre-foreclosure sale

If all else fails you can avoid foreclosure and sell your house quickly. You may not get what you expect for your home but this will help you avoid foreclosure and pay off your mortgage. Real estate businesses often help people. Get out of a foreclosure situation by buying the home for a reduced amount.


Do I Qualify for Alternatives?

Don’t stick your head in the mud. Ignoring the problem won’t make it go away. Your first step is to contact your lender, and then contact a housing counselor or real estate investor to help get you out of the problem.