How to Save Your Home from Foreclosure

Thanks to fierce competition among lenders, a dizzying array of mortgage options, and government policies to encourage home buyers, more people than ever before are able to buy homes. Unfortunately, the increase in homeownership has been accompanied in many countries by record foreclosure rates.

Just a couple of missed mortgage payments can start foreclosure proceedings, and before you know it the house you've worked so hard to buy can be taken away from you. Worse yet, you may still end up owing money if the sale of the home doesn't cover your loan balance, and a foreclosure hits your credit like a freight train.

If you're threatened with foreclosure you may be able to prevent this scenario, but you've got to act fast.

Steps

1. Make your mortgage payment your top priority. If you're in serious financial trouble, don't worry about credit card bills, personal loans, and other unsecured debts until after you pay your mortgage. Falling behind on these debts can cause you to accumulate fees and can damage your credit, but the consequences are simply not as serious as falling behind on your mortgage, so prioritize your debts accordingly.

2. Get help. If you're having trouble making payments you may benefit from credit counseling or a debt management program that includes housing counseling. Your lender may have such a program, or you can see if your local housing authority or extension service offers debt counseling or foreclosure avoidance services.

If not, Choose a credit counseling agency carefully, as some agencies charge exorbitant fees that will make you even worse off. Depending on your circumstances a debt management program may also be a good option. In the U.S., the Department of Housing and Urban Development (HUD) maintains a list of credit counseling and debt management agencies approved to work with HUD loans, and they may also be able to help with other lenders.

There may also be government or charitable programs to provide financial or legal support to help you avoid foreclosure. Finally, you may also want to consult an attorney, especially if your situation may be the result of predatory or deceptive lending practices.

In any case, get help quickly so that you can take advantage of all possible remedies, and above all be careful about who you deal with (see the warning below).

3. Contact your lender immediately if you can't make your full monthly payment. Don't wait for a letter from the bank, and certainly don't ignore their correspondence. Lenders generally don't want to foreclose on properties, and they'll generally be willing to work with you if you make a good-faith effort to make payments and if your inability to do so is temporary.

 Career
 Finance
 Finding a Job
 Success at Work
 Food and Diet
 Health
 How To
 Scams

RSS Feed