How to Avoid Foreclosure of Your Family Home

Real estate lawyer

Foreclosure is a scary term and none of us like to think about it. No one ever buys a house thinking about the possibility of having to foreclose one day. Of course it is a last case scenario and is never considered until all other possibilities have been tried and run out. However, there are a few ways that you can avoid foreclosure:

Communication

This is incredibly important: do not cut ever off communication with your lender. This is the number one mistake people make. They get desperate or don’t want to deal with the issue and so they stop talkin go the lender. However, as soon as communication from the borrower ceases, foreclosure plans move forward. As soon as you realize you are going to be having trouble making your payments, contact your lender and talk to them about what is going on. There are loan modification, payment plans and extensions available to those who will simply communicate with the lender. Foreclosure is expensive for a lender so they want to avoid it just as much as you do.

Don’t Stop Payments

Even if you miss a few payments, don’t stop paying all together. Pay anything you can. Paying something, anything as well as communicating with your lender as to why you are paying less shows that you are still trying and have not given up. This looks very good to a lender trying to help you. It can be frustrating trying to help a borrower who has already conceded and decided the house is gone.

MHA

Making homes affordable is a program that offers free consultations and advice to help you keep your home. There are other programs available also, depending on what kind of loan you have. Your mortgage lender will be able to advise you further.

Beware of Scams

If you are facing foreclosure or the eviction process, be aware that there are dishonest people out there that target vulnerable homeowners when they are struggling with their mortgage payments. These people will advertise through:

  1. Flyers

  2. Local publications
  3. Online forums
  4. Direct contact through foreclosure notices or an eviction case

Here are a few things to look for when you are suspicious of a scam:

  1. Lofty promises to help keep your home, for a fee.

  2. Offers to negotiate with lender.
  3. Offers bankruptcy in place of foreclosure.
  4. Tells you to sign over your home to them in order to make smaller payments until you can buy back the house.
  5. Has you make payments to them instead of lender.
  6. Claims affiliation with government mortgage assistance for a fee. True government mortgage assitance programs do not charge fees.
  7. Offers to perform forensic mortgage loan audit.

If any of these things happen to you, stop communications with that individual or company immediately and give them no personal information. If you have already shared person information, you can file a complaint to the Federal Trade Commission or your local U.S. Trustee Office. Never pay anyone any money that is a fee or charge for business until you know they are a legitimate service. The safest way is to work directly with your lender and only those who your lender refers and no one else.

Knowing your lender helps when things start to go bad. Even if you are in good standing now with your mortgage and are not in fear of the foreclosure process, it is still good to be in constant contact with your lender and maintain a good reputation with them.

If you are thinking about or looking into buying a foreclosed home, it may seem like the ideal situation because of how the price falls but the truth is, there is a lot more going on behind the scenes. You need to know your stuff before signing anything. Inspect the home, trust your real estate agent and lender and don’t limit yourself. Foreclosed homes can come with liens against the home or repairs that need to be done as well as other problems. Make sure you are 100% confident before diving in feet first. There are many benefits associated to buying a foreclosed home but you don’t want to be blind to the issues that might potentially rise now or in the future.

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