The key to avoid foreclosures is talking to the right people at the right time. For instance, there are counselors who can help you with the process. At some point, you will need to talk with the bank. There are also state and federal resources you can access to avoid foreclosures.
First of all, you might want to start by talking to a foreclosure counselor. Now, when you want to avoid foreclosures, time is of the essence, so don’t put things off thinking you can call the counselor “tomorrow.” Do it today!
There are a number of different foreclosure avoidance counselors. Some of these charge you a fee – which can be quite hefty. But there are also foreclosure counselors who are paid through non-profit organizations or by the government.
Avoid foreclosures counseling services are provided for no cost by nonprofit housing counseling agencies which work in partnership with the Federal Government. These agencies are funded, in part, by the Department of Housing and Urban Development and by a non-profit organization called NeighborWorks(R) America.
But, at some point, you will also have to talk to the bank. Again, you should do this sooner rather than later.
If your mortgage problems are temporary, there are a number of solutions that your lender can help you with. For instance, to avoid foreclosures, they will often do a “forbearance” which is a reduced or suspended payment for a limited period in order to let you catch up.
If you have a deficiency, but need to catch up and have the money to do it in a lump sum payment, the lender will often reinstate your loan under the old terms.
If your situation is long term, you also have some options. For instance, mortgage modifications can take many forms to help you avoid foreclosures. For instance, the bank can add the missed payments to the backside of the loan. They can change the interest rate including changing an adjustable to a fixed interest rate loan. They can also extend the number of years on your mortgage making your monthly payment lower.
Other options to look into when you are trying to avoid foreclosures include selling the house. If you have equity in or are even on your home, you might be able to sell the home directly, assuming you can find a family or investor who wants it.
If you are “upside down” on the house, consider solutions such as a sort sale or Deed in Lieu of Foreclosure. Both of these situations have you turning the house over to either an investor or the bank and walking away. While this will negatively affect your credit, it won’t be nearly as bad as having a foreclosure on your record. If you pursue one of these programs, make sure that you get in writing that the bank is accepting the deal as satisfaction in full for the debt so that they don’t hit you for a deficiency judgment later.
There are several ways to avoid foreclosures. But, the important thing is to get the information you need and then act on it right away.