How to Avoid Foreclosure

Today, a large number of homeowners are facing foreclosure and, as you can imagine, many are unsure of what steps they should take. Anyone facing foreclosure should make efforts to become well educated on the subject.

For example, homeowners should, at the very least, familiarize themselves with their local and state foreclosure laws, their rights as homeowners, and so forth.

Having said that, it is important to remember that foreclosures are preventable and knowing how to avoid foreclosure is of the utmost importance for the homeowner in peril of losing his or her home.

Steps YOU Can Take to Prevent Foreclosure

I am sure you understand that the easiest way to avoid foreclosure is simply to make all your monthly mortgage payments and do so on time.

If you cannot keep your payments up-to-date, however, some financial lenders will prepare to foreclose after only one or two missed payments. While you will not be removed from your home right away, just know that the process is easy to get started, so never fall behind in your payments. It is important that you understand your lender's rules and expectations on this.

Obviously, simply telling you that you should make on time monthly mortgage payments doesn't mean that you will or that you even can.

If you see financial trouble in your near future, such as being laid off from work or being out of work due to an injury, immediately speak to your lender. If the lender knows that your financial troubles are only temporary and if you have a history of on time payments in the past, they may be willing to work with you. This may involve smaller payments for the time being, or whatever else can be worked out.

What if....?

Even if you are not able to get your financial lender to lower your mortgage payments, even just temporarily, there are still other ways that you can avoid foreclosure.

First and foremost, you should never, under any circumstances, ignore warnings and phone calls from your lender. Even if you do not intend, or simply see no way, to keep your home, it is important to be in constant contact with your mortgage holder. At the very least, you will need to know what happens next and when you should leave the property.

Don't Hold Back

If you have any kind of assets...jewelry, a second car or other belongings that can be sold, you are encouraged to do so. This may give you the money needed to get your mortgage up-to-date and in good standing. Even if you cannt bring it to one hundred percent good standing, it shows your financial lender that you are trying your hardest to keep your home.

As easy as selling some of your belongings sounds, you should know that acquiring a second job is often your best chance of success. While it may be a shock to your pride, I know a banker who kept HIS home by delivering pizzas.

Don't knock it, by the way. A few years back, during a desparate time, I delivered pizzas and made almost $20 an hour.

Increasing your income and creating some sort of temporary cash flow are just two ways to avoid foreclosure and keep your mortgage payments up-to-date. With that in mind, many homeowners facing foreclosure are surprised to learn just how much money they can save up, or at least hold on to, simply by prioritizing their spending. Due the recent rise in costs of gasoline, food, and entertainment, consumers who never had to worry about using grocery coupons or having a monthly family budget need them now. All homeowners, especially those facing foreclosure are encouraged to track their spending habits and eliminate unnecessary purchase. The money saved should be applied towards mortgage payments.

Another easy way to reduce the risk of foreclosure is to seek professional assistance when needed.  In some states, you can find local governments and even mortgage lenders who occasionally provide free foreclosure assistance to homeowners in need.  As soon as you suspect that foreclosure may be an issue, you should meet with an attorney specializing in foreclosures or a HUD (United States Department of Housing and Urban Development) approved counselor.  These are individuals who can advise you of your rights, help you understand your state’s foreclosure laws, as well as help you develop a plan of action. 

There will be a mental aspect as well.  Homeowners facing foreclosure often report an overwhelming feeling that just cannot and will not go away.  This is the time to drop any macho, or fe-macho, thoughts and seek professional help.

Finally, the United States Department of Housing and Urban Development (HUD) advises homeowners to not fall for foreclosure scams.  These scams are often referred to as foreclosure recovery scams.  Never believe the claim of an individual or company who says they can stop foreclosure proceedings with one signature.  If you are not careful, you could lose your home anyway.  You could become a renter who can’t afford the new rent.  Never sign any documents pertaining to your home without first having a trusted and reputable attorney review them.

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