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.
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.
2. DO NOT IGNORE MAIL FROM YOUR LENDER
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.
3. TALK TO A HOUSING COUNSELING AGENCY
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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