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People loose their homes through foreclosures on a daily basis. It is no hype. Foreclosures are at a record high and regrettably in lean economic times such as these, foreclosures are quickly becoming more common place. It however does not have to be that way. Foreclosure can often times be avoided if the homeowner is willing to put forth a little effort to deal with the situation. If you find yourself unable to make your mortgage payment, you should:

1. Address the problem.

If you find yourself missing a mortgage payment, do not ignore the problem. The longer you put off dealing with the situation the more difficult it will become to fix it. More importantly, the number of options you will have available to you begin to dwindle the longer you wait. The problem will not fix itself and should not be ignored.

2. Contact your lender.

Contrary to what you may have heard your lender really does not want to foreclose on your home. Do you really think they want to go through the lengthy and costly process of foreclosing, possibly evicting and then reselling your home often at a discounted price? Most lenders would much rather work with you to find a solution that will keep you in your home and making payments. Most do want to help homeowners and can offer valuable insight.

3. Do not ignore notices.

In most situations correspondence from your lender is going to come through the mail. Do not ignore these notices. The first few notices will probably offer you options regarding how you can prevent foreclosure from occurring. Ignore these and later letters will probably be notices of pending legal action. Pick up the phone and talk to your lender. If you do not feel comfortable talking to them on the phone, then be sure you at least respond in writing to their letters.

4. Be informed of your rights.

If it has been awhile since you have reviewed your loan document, it might be a good time to pull it out and read through it once again. Your loan document will outline exactly what your lender can and can not do if you fail to make your payments. Also review your state’s foreclosure laws. These laws will tell you just how long the foreclosure process will generally take and the steps involved.
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5. Know your options.

You have options even when faced with a possible foreclosure. Your lender may present you with several which can range from forgiving a payment to adding missed payments back into the loan. If you decide you no longer want to own the home, you could still sell it outright, consider a short sale or even sign a Deed-in-Lieu of Foreclosure with the lender. This would essentially give the house back to the lender without going through a foreclosure. Of course, each of these options has possible consequences to you, your credit and tax situation so explore each thoroughly before proceeding.

No one ever expects that they could loose their home in foreclosure. But then no one ever thinks they will be faced with a job loss, an overwhelming debt load, divorce or death; all of which could lead to a foreclosure. By better understanding the foreclosure process and options available to us for handling such an event, we are in a better position to deal with it if and should it occur. Remember, you always have options as long as you do not ignore the problem and work with your lender to find solutions best suited to your individual situation.

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Tags: Foreclosures, Avoiding Foreclosure

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Tags: Avoiding Foreclosure, Foreclosures