How to Stop Foreclosure Fast
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1. Contact your lender as soon as you have a problem
Lenders have workout options (choices) to help you and:
. These options work best when your loan is only one or two payments behind
. The farther behind you are on your payments, the fewer options are available
Many people avoid calling lenders about money troubles because we:
. Believe that if lenders know we are in trouble, they will automatically rush to a collection agency or foreclosure (seize property for failure to pay a mortgage debt)
. Feel embarrassed discussing money problems with others
Don't assume that your problems will quickly correct themselves:
. Contact your mortgage lender to discuss your circumstances as soon as you realize that you're unable to make your payments
. Don't lose valuable time being overly optimistic
. Look forward to your lender being willing to explore many possible solutions, without guaranteeing any one particular solution
But lenders want to help borrowers keep their homes because:
. HUD and private mortgage insurance companies and investors like Freddie Mac and Fannie Mae require lenders to work aggressively to help borrowers facing money problems
. Foreclosure is expensive for lenders, mortgage insurers and investors
2. Talk to a housing counselor
If you don't feel comfortable talking with your lender, you should contact a housing counseling agency immediately and make an appointment with a counselor. Most FHA counselors are free or cost very little. A counselor can help you:
. Learn which of the various workout arrangements lenders consider makes the most sense for you and your family, based on your circumstances
. Review your financial situation, determine what options are available to you, and negotiate with your lender
. Protect you from future credit problems before you get too far behind on mortgage payments
. Call the lender with you or on your behalf to discuss a workout plan
. Give you information on services and programs in your area that provide financial, legal, medical or other assistance
3. Prioritize your debts
You will need a new, tightened budget if you lose a job. Prioritize your bills and pay those most necessary for your family: food, utilities and shelter.
Failing to pay any of your debts can seriously affect your credit rating, but if you stop making your mortgage payments you could lose your house. Try these suggestions to keep your home:
. If your employment income has stopped or been reduced, first consider getting rid of or cutting back on other expenses (such as dining out, entertainment, cable, or even telephone services).
. Whenever possible, use any income available after paying for food and utilities to pay your monthly mortgage payments.
. Take any responsible action that will save cash.
. If you still do not have enough income, consider cashing out other financial resources like stocks, savings accounts, or personal property that may have value like a boat or a second car.
4. Explore loan workout solutions with your lender
First and foremost, if you can keep your mortgage current, do so.
But if you find you are unable to make your mortgage payments, you might qualify for a loan workout option. Some options may not apply to your loan if it is not insured by FHA. Check with your lender to see which option may be available.
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