What Should I Know About Facing Foreclosure?

Malcolm Tatum

Facing a foreclosure is one of the most difficult situations that a homeowner can experience. Part of what makes facing foreclosure so difficult is that many people see no other way to deal with the situation but to lose their homes. However, you may be able to obtain foreclosure assistance and get back on your feet much easier than you think.

Homeowners may receive cash for vacating their foreclosed home.
Homeowners may receive cash for vacating their foreclosed home.

When facing foreclosure, it is important to understand that no one really wants to see you lose your home. That includes the bank or mortgage company that holds the mortgage to the property. Foreclosing on property takes time and money that your creditor would prefer to use in some other endeavor. However, if you don’t communicate with your creditor and attempt to work out some type of arrangements to bring the account up to date, they will have no choice.

Third-party lenders may be able to prevent foreclosure by providing a loan to get mortgage payments back on schedule.
Third-party lenders may be able to prevent foreclosure by providing a loan to get mortgage payments back on schedule.

Instead of failing to respond to phone calls and letters from the mortgage company, contact the lender directly. Explain your situation, and be prepared to provide evidence that you are telling the truth. Schedule an appointment to meet with the creditor face to face to discuss possible means of resolution. Making this effort early on will increase the chances that your mortgage holder will work with you, and be willing to explore possible ways to avoid the necessity of you facing foreclosure actions.

Assuming that your lender is willing to work with you, be prepared to participate actively in crafting a solution. This means taking along all pertinent information about your finances, as well as some realistic suggestions about how to work through the current financial crisis. At the same time, you should be prepared to demonstrate what you are doing to trim expenses and thus increase the likelihood of being able to catch up on any payments that are currently late. Since facing foreclosure means facing the possibility of losing your home, it is important to make it clear you are willing to do whatever you can to prevent the loss, and eventually settle the debt in full.

Even if your current lender is not willing to work with you, don’t give up. Seek out third party lenders who may be able to help you get the mortgage back on schedule, either through refinancing, or extending a loan that will allow you to catch up any past due payments. Depending on your credit history, you may be able to secure loan terms that are very attractive.

In situations where there is simply no hope of being able to work out an alternative solution, your best bet is to prepare to lose your home. With this scenario, facing foreclosure takes on an entirely different approach. Start looking for a new place to live, and make arrangements to move your personal effects out of your home. Continue to communicate with your mortgage holder, providing information on when you will be out of the home, and how to reach you in the future. Work with them to make the foreclosure as painless as possible for everyone concerned.

Never assume that you have no alternatives when facing foreclosure proceedings. Between the foreclosure programs offered by some lenders and other forms of foreclosure assistance, there is a good chance you can find a way to keep your home. Check in your community for available resources; the local banking association as well as the local bar association should be able to help you identify resources that could make a huge difference in your situation.

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