If you are a homeowner who is facing the possibility of foreclosure on your home, it’s time to deal with your situation before things get worse. Often times, the very things that got you into this tricky situation are the things that will get you back out.
Apart from those who knowingly participate in mortgage fraud — with the intention of never making a single payment — most homeowners face sudden extenuating circumstances that force them to stop making timely mortgage payments. A few of those reasons are job loss, sudden illness or medical emergency, death in the family, divorce, excessive debt, job demotion, inability to pay an increasing interest rate, or an unexpected major home maintenance expense.
The best way to avoid foreclosure is to prevent the filing of a Notice of Default. Lenders do not want to foreclose but will file a Notice of Default to protect their interests, if necessary. If you know you are unlikely to meet your mortgage obligation, the first thing you should do is call your lender.
Don’t put it off, be embarrassed or ignore letters from your lender because those responses will make the situation worse, not better. Depending on your particular situation and hardship circumstances, there are some options your lender might propose to you.
Make up payments by working out a repayment plan with your lender. In some cases, lenders might waive your obligation for a few months of mortgage payments with debt forgiveness, but don’t count on this happening for you. You can also try to spread out the missed payments over a longer term to give you a chance to pay things back slowly. Additionally, you can try to change the terms of the loan, by freezing the interest rate or extending the amortization period. Back payments can be added to your loan balance or you can ask to have the missed payments to be made into a separate loan.
When the lender files a Notice of Default, your options are limited. That is why it is better for you to call your lender before falling behind on your payments, because lenders are often reluctant to work out repayment schedules after foreclosure proceedings have started.
You will be given a certain time period to bring the payments current, pay the costs of filing the foreclosure and stop the foreclosure. This is called reinstatement of your loan. If that doesn’t work, you have the following options; sell your home, consider a short sale, sign a deed-in-lieu of foreclosure, or consider bankruptcy. These options are tough, but an expert can help you sort through your options and pick the one that’s right for you.
That’s where I come in, my name is Kevin and I can help you sort through your options when facing foreclosure. Visit my website to learn how I can help you overcome the fears of foreclosure. Together, we can get through anything.