Avoid Foreclosure: Ten Tips to Avoid Foreclosure
If you are caught up in the sub prime mortgage foreclosure mess, there are steps you can take to prevent the worst from happening. The secret is communicating with the lender who really isn’t anxious to have the home back in lieu of ongoing monthly payments. Don’t wait to use this information until the accrued arrearage is so large that there’s really no way out. Try these tips to avoid foreclosure as soon as you realize that the new, higher monthly payments have you in financial trouble.
1. Don’t just ignore the problem. The mortgage ‘tooth fairy’ isn’t coming. The further behind you get, the more serious the problem.
1. Talk to your lender immediately. Don’t dilly dally around. The lender absolutely doesn’t want to replace you as the homeowner. His business is money, not property. There are options available for you.
1. Never ignore mail from your lender. When your lender starts sending you mail, it will most likely include the suggestion of some options for you. It will also make clear what the lender’s options are if you fail to make your regular monthly mortgage payments. Look up your state’s laws on foreclosure so you know just where you stand.
1. Understand your legal rights. Dig out all your mortgage papers even those with all the fine print. Read them carefully. Contact your state’s Government Housing Office to get further information because every state has different laws. In this problem, knowledge is power and positive thinking will help you much more than despair.
1. Learn all about foreclosure prevention (loss mitigation). Here, the information is readily available on the Internet at www.fha.gov/foreclosure/index.cfm . If worst comes to worst, ask a lawyer for help. If you can’t afford the fee, there are lawyers to help locally for people who can’t (Legal Aid Society). Refer to your yellow pages to find one or, search the web.
1. An HUD-approved housing counselor may help. You can also consult the U.S. Department of Housing & Urban Development that offers free or extremely inexpensive nationwide housing counseling to consumers. These government professionals will aid you in understanding the laws in your state, detailing available options and reorganizing your finances. They can also represent you in your dealings with your lender if you need their help. Locate your nearby HUD-approved counselor by calling 1-800-877-8339.
1. Spend your money intelligently. The only priority that should precede keeping your home is your own good health. Go over your finances carefully and search for any ways you can find to reduce monthly costs. There are optional expenses you can do without if you have to such as cable TV, memberships, subscriptions to magazines or video clubs, book clubs, entertainment, dinners out, etc. Nobody wants to give these up, but when push comes to shove, it’s better than being homeless. Also, you can delay credit card payments and any other ‘unsecured’ debts so that your mortgage payment comes first.
1. Use any assets wisely. Ask yourself what you may own that you can sell to raise much need cash? Second car? Jewelry? You can also cash-in a whole life insurance policy and use the proceeds to solve the mortgage crisis at hand. And, there’s always a second or part-time job to bring in more monthly money. If nothing else, efforts like these will show your lender just how serious you are about saving your home from foreclosure.
1. Don’t fall for ‘foreclosure rescue’ scams. There are numerous unscrupulous people out there who will promise that they can solve your problem with the lender. More often than not, all they will do is take your money and do little or nothing for you or even end up owning your home with you as a tenant. A financial counselor or HUD-approved counselor can do all this and more for free.
1. Also avoid ‘foreclosure prevention’ scams. Yes. There are also people out there who will tell you they can stop imminent foreclosure dead in its tracks. Don’t believe it! If you are dumb enough to sign a contract with these individuals, you will be giving them title to your home and becoming a renter and that’s all. Don’t ever sign any form of legal document without the advice of an attorney. Never!
These tips to avoid foreclosure represent the only real steps you can take to alleviate or even solve your foreclosure problem. Don’t be taken in by big promises that lead you into disaster. Be smart, be aggressive and take the right steps to a possible solution.
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[...] Jeff Collins wrote an interesting post today onHere’s a quick excerptIf you are caught up in the sub prime mortgage foreclosure mess, there are steps you can take to prevent the worst from happening. The secret is communicating with the lender who really isn’t anxious to have the home back in lieu of … [...]
[...] bank can ask a borrower to pay and a quarter for four months and a payment and half for two months. Avoiding foreclosure is very much important for all of us. So it would be better if we try to get into one of these [...]