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How to prevent foreclosure

Foreclosure. It's a term that's sending shivers of fear down the back  for many a household in the present recession. If you see financial troubles ahead, you can take action now to prevent  foreclosure on your house.

If you see financial troubles ahead, you can take action now to prevent  foreclosure on your house.
As with anything of this magnitude, you need to react in a hurry. Don't  wait until it's too late to recover the loss.

You may be facing:

Cuts in hours or overtime pay
Illness, injury, or the death of a family member
Divorce or separation

If your family is having to deal with these changes and cannot pay your  bills, then now is the moment, to look closely at your debt and what  your income, is like, getting rid of over spending and reaching out for  professional help, if you still can't pay your bills. Taking action now  can help you protect your family from the loss of your home.
Following below, are some steps you need to take now, to secure your  home for the future, and put the threat of foreclosure behind you.
Remember. The time to act is now. The longer you wait, the bigger the  problem becomes.
1. Get in touch with your MORTGAGE COMPANY NOW !

Many people are worried about calling their lenders when they have  financial difficulties. Most of us are embarrassed to talk about our  money problems with others or think that if lenders know we have  difficulties, they will rush to collection or foreclosure.
Lenders want to help borrowers, to retain their homes. Foreclosure is  costly for lenders, mortgage insurers and investors. HUD/FHA, as well as  private mortgage insurance firms and investors like Freddie Mac and  Fannie Mae, require lenders to work hard with borrowers who are facing  financial problems.
Lenders have workout options to help you stay in your home. However,  these options work better, when your loan is only a couple of payments  behind. The the further in arrears, you are on your payments, the fewer,  the options, are left.
Do not believe that your problems will quickly right themselves. Don't  loose valuable time by being too optimistic. Get hold of your mortgage  lender, to discuss your situation, as soon as you know, that you are not  able, to make your payments. Also, be warned, it is not guaranteed that  any particular grace will be given, most lenders are willing to  research, every possible option.
To assist you, lenders typically need:

Your loan account number
A brief explanation of your situation
Recent income documents (such as Pay stubs; Benefit Statements from  Social Security, Disability, Unemployment, Retirement, or Public  Assistance. If you are Self-employed, have your tax returns or a Year- to-date Profit and Loss Statement ready for reference)
List of household expenses

Expect to have many phone calls, with your lender. Typically, your  lender will send you a "loan workout" package. This package contains  information, forms and instructions. If you want to be considered for  assistance, you must complete the forms and send them back, to your  lender quickly. The whole package will be examined, before the lender  talks about a solution, with you.
CALL NOW! The sooner you call; the sooner help is possible. 


If you do not speak to your lender, your lender will try to contact you  by mail and phone you, shortly thereafter, when you have stopped, making  payments. It is really important, that you respond to the mail and the  phone calls offering you help. If your lender has no contact from you,  they will be forced, to start legal action, leading to foreclosure. This  will significantly, increase the cost of getting your loan, back up to  date. 


If you are not comfortable, with talking to your lender, you should  immediately contact a HUD-approved housing counseling agency and  schedule an appointment with a counselor. A counselor will help you  assess your financial situation, then work out, what options are  available to you, and help you communicate with your lender. A counselor  will be up to date, with the various workout possibilities, that lenders  will consider and will know what steps, to take, that makes, the most  sense for you and your family, based on your present situation.  Additionally, the counselor can contact the lender, with you or with  your consent, to discuss a workout plan. By meeting with a counselor  before your mortgage payments are too far, in arrears, you can protect  yourself from further credit problems.
A good counselor will help you create a monthly budget plan, to make  sure, that you can pay all of your monthly expenses, including your  mortgage payment. Your personal financial plan will easily show you, how  much money you have available to make the mortgage payment. This  analysis will help you and your lender, to decide, whether a reduced or  delayed payment schedule, could help you. Also, a counselor will have  information on services, resources, and programs, that are available in  your local area, that may give you further financial, legal, medical or  other help, that you may need.

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