How to Avoid a Foreclosure

Preventing Foreclosure

Foreclosures are no longer at all-time high but there are still 4.2 million loans in a delinquent or foreclosure status.  Consumers need to be educated on what they can do to keep their home from being foreclosed.

The most obvious way to avoid a foreclosure is make the payments on time.  However, if this is not possible there are some steps to take to avoid falling behind in payments and foreclosures.

Know Your Mortgage Rights

Every homeowner should read all loan documents carefully.  These documents spell out exactly what the lender can and can’t do in the event the homeowner cannot make or are behind in loan payments.  Be sure to find out what and how much any fines or fees can be assessed by the lending agency.  Loan documents also contain information regarding the rights and responsibilities of the lender and lendee.

Read all Mail

You must read all correspondence from your lender.  Do not throw away any letters or claims.  Keep all correspondence you receive for future reference.

Know Foreclosure Laws

Become familiar with foreclosure laws in your states.  The U.S. Department of Housing and Urban Development provides resources and foreclosure laws for each state.

Unemployment Protection

Some states offer unemployment or underemployment protection.  Each state defines the filing dates and requirements.  The law requires that lenders advising you that you are entitled to receive financial counseling if not employed.

Contact The Lender

Many people avoid calling the lender because they are embarrassed to discuss money problems.  Many lenders have options available to consumers to help you keep your home.  These options typically work best for loans which are one or two payments behind.  The farther behind on payments fewer options available to the homeowner.

Contact a Financial Counselor

A legitimate financial counselor can help you work through financial problems.

Prioritize Your Bills

Take a long look at your bills.  Make paying the mortgage one of the top bills to pay.

State and Local Resources

Many states and local governments offer resources to help homeowners who are about to default on their loan.  Some states provide legal assistance, consumer credit counseling, and emergency homeowner’s Loan programs.  The U.S. Department of Housing and Urban Development offers links for each state on programs.

Hope Now

Hope Now is an organization which helps homeowner’s stay in their home.  They are a counseling service which works to find a solution to your problem.

Sell Assets

Attempt to sell assets such as jewelry, whole life insurance or a second car to bring the note current.

Avoid Foreclosure Scams

There are some unscrupulous people who attempt to take advantage of people in need.  This is a vulnerable time for desperate homeowners.  Don’t become a victim to scams.  Beware of anyone who offers to negotiate a loan modification or guarantee to stop or delay foreclosure for a fee.  Always check their credentials, reputation and experience prior to utilizing their service.