Is Your Home In Danger Of Foreclosure Soon? Here Are The Immediate Steps You Need To Make

1. Gather The Documents And Educate Yourself

The first step is to gather all your documents and get organized as soon as possible. This should help you know where you stand at the moment and what you can do to avoid the imminent threat to your home.

Some of the documents you’ll need to collect are the monthly billing payments, property tax information, insurance information, the record of your payments, escrow statements where applicable, and the letters exchanged with the lender.

From the promissory note and the mortgage terms, you should be able to identify some of the possible options you may have.

You must also learn about your legal rights during the foreclosure process. For instance, in most cases, a lender cannot initiate the foreclosure procedure until you are 120 days delinquent.

The problem is that many mortgage terms are filled with lots of legal jargon that some homeowners may not understand. That’s why hiring a foreclosure defense lawyer is crucial.

When should you hire a lawyer? As soon as possible. The professionals at fight13.com explain that you can hire a lawyer before the servicer starts the foreclosure process or even when you are deep in the lawsuit. But of course, the earlier you get the attorney, the easier it is to avoid losing your home.

2. Call Your Lender

You should know that foreclosure is as tiring to the lender as it is to you. Servicers do not want your property, and they’d rather figure a way to find a solution than go through time-consuming and expensive foreclosure lawsuits.

By negotiating with your lender, they may extend the following options to you.

• Refinancing

Your lender could give you a new loan with revised terms to help you get back on your feet without losing the home. This loan will cover the missed payments as well as the balance that’s still owed. The refinancing plan will have new interest rates and lower monthly payments to reduce the burden.

One of the advantages of refinancing plans is they usually do not affect your credit rating.

• Loan Modification

Instead of providing a new loan, this modification adjusts the terms of your current mortgage. It will change the interest rate, length, and amount due. This, too, can help you make the monthly payments without straining too much.

• Repayment Plan

You will sit with your lender to come up with a new manageable payment plan based on your budget. The new agreement will make up for the late payment and the balance.

• Forbearance

Forbearance is an agreement between you and your lender to suspend the payment for a certain period. This effectively delays the foreclosure. The suspension can give you sufficient time to sort your finances and continue with the payments.

3. Consult A Housing Counselor Approved By The HUD

Housing counselors can provide a solution when you’ve reached a deadlock with your lender.

Sadly, not all housing counselors have the clients’ best interests at heart. Some of them will take advantage of an already desperate situation. To avoid this, you must find a HUD-approved counselor.

4. Consider A Short Sale

It’s possible that your financial predicament will not allow you to complete your mortgage payment anytime soon. No type of loan remodification or refinancing option will be enough to save your home in such a situation. This leaves you with very limited options, one of them being a short sale.

In a short sale, you will work with your lender to sell the house. Therefore, you will avoid foreclosure, but you’ll also lose your home in the process.

So why should you consider the sale? A short sale is beneficial in several ways. First, it doesn’t have as much damage on your credit report as a foreclosure. This means you’ll be able to buy a new home much faster.

It can also help you avoid the social stigma associated with the foreclosure.

5. Consider Filing For Bankruptcy

Filing for bankruptcy suspends the foreclosure. It can also reduce or eliminate your debt. On the flip side, bankruptcy will have a dramatic effect on your credit score.

If you decide to go through with this option, you’ll probably need to consult an attorney to help you with the next steps. There are generally two types of bankruptcy you could file for. One allows you to repay the creditors through a repayment plan, while the other uses a court-appointed trustee to sell off your property and repay the creditors. Your lawyer will help you decide which one is ideal based on your unique situation.

That’s how to delay or avoid an imminent foreclosure. While you may be able to do some of the work yourself, it’s advisable to pick an expert brain to help you with the legal issues.