Real world plans for preventing foreclosure, learn more.
What actions should you take to save your home from foreclosure.
you are having trouble making your monthly mortgage payments, you may be
able to protect your home, but you must act immediately. Your action may
prevent the loss of your home through foreclosure. This site may give
you a framework to start the process, but it is only the beginning. If
you are in serious financial difficulty, you should seek professional
assistance and/or legal counsel to best protect your investment and your
First things first, call your mortgage lender. They will want to work
with you and help you find a way to keep your home. The longer you wait,
the more difficult this will be to do. If you are three months or more
behind in your mortgage payments and the lender has not heard from you,
they most likely will assume that you do not intend to pay. Don’t avoid
your lender, work with them.
Be ready to discuss your situation in detail. Your lender will need
complete information in order to help you. Think about what the lender
will ask and prepare appropriate answers for the questions you may be
asked. You are making a case as to why the lender should not proceed
with the foreclosure. Know in detail the circumstances of your financial
Options from your lender
There will be several options, many of which are discussed in detail in
this site, that you lender many offer. Each one will be individual to
your circumstances. Your lender may offer:
A debt counselor can look at all your outstanding debt to see if any of
it can be restructured or consolidated. Mortgage payments are often the
last payment a person will let slide, so when you start having trouble
making your mortgage payments it is likely that you are experiencing
difficulty with your other payments as well. Your lender can help you
make a budget to structure a repayment plan.
If you have sufficient equity in your home it may be possible to recast
the loan for an extended period of time to lower your overall monthly
payments. The past due is usually be added into the new loan.
Sell you home
If your financial situation will not allow you to stay in your home, it
may be necessary for you to sell the home and find more affordable
living accommodations. It may be possible to sell your home and pay off
both the outstanding mortgage balance, thus avoiding foreclosure and
salvaging your credit. By working closely with your lender, they many
allow a reasonable time to sell the home. If the value of your home has
declined recently, a short sale may also be possible.
Deed in lieu
This is considered a voluntary foreclosure and could affect your credit
record. The lender will work with a real estate agent to complete the
sale. While you will lose your home, you will not be held liable for any
deficiency if the home sells below your loan amount.
This should be considered as a last resort. It may temporarily slow the
foreclosure proceedings, but will adversely damage your credit record
for at least seven years and you will lose control of your finances.
However, foreclosure proceedings are usually stopped until bankruptcy is