Steps For Avoiding Foreclosure


If you're struggling with your finances and don't know what your options are, you're going to feel helpless in your situation. Here are some tips and tricks to avoid bankruptcy, and options that are available to help you resolve your outstanding mortgage.

The best advice you can ever get regarding your mortgage is that your highest priority in paying bills is to pay your mortgage first. That's hard advice to follow, though, because you can't live without utilities or food. It becomes even more complicated when you need to buy gas to look for a job or get to work to make money to pay for your bills. A mortgage often takes a backseat to these kinds of expenses.

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You do need to scrutinize your spending while working on your mortgage payments. Have a family meeting to gain a consensus that everyone will pitch in and help save money. Identify areas of spending in which you can save. Oftentimes, there are areas you can cut back that you just never thought of.

For instance, rent movies from a local Redbox that only cost $1 per night, or rent from online sources like Nexflix or Blockbuster for a nominal monthly fee. They all can be found online. Instead of dinner and movie night outs for your family, have a dinner theme night at home, along with watching a rented movie. These are just a few strategies that can help you save lots of money.

At the onset of struggles to pay your mortgage, contact your lender. Talk to your lender about your situation. Maybe you've experienced a job loss or medical emergency - two of the most predominant reasons people end up in foreclosure. Discuss your situation with your lender, find out what they are willing to do. Most often, lenders don't tell you what your options are. Instead, they require you to complete a workout packet that includes providing a hardship letter, submit it for consideration and then wait.

If you are waiting on a response from your lender, don't let your mortgage fall into default. Understand the laws of your state in regards to foreclosure. Find out the timeframes of when certain notices need to be filed, and take action if your lender is taking its time in responding to you.

In regards to mortgage rescue companies. Proceed with caution. Many have fallen prey to mortgage rescue scams. You don't want to be one of them. Do everything you can yourself. You don't need to hire a mortgage company to assist you. You can do everything that a mortgage rescue company would do for you, anyway.

Contact HUD and find a foreclosure avoidance counselor in your area. Visit the HUD website for specific phone numbers and assistance. Find out what options might be available to you. You could also access the Making Home Affordable website at makinghomeaffordable.gov. The direct phone number is (888) 995-HOPE. They will refer you to a counselor that can assist you. Make sure you ask lots of questions.

Don't hesitate to enlist the assistance of a bankruptcy attorney if your situation becomes serious enough that you will lose your home. Many have lost their homes waiting for a lender to respond to their inquiries regarding forbearance, reinstatement, repayment, a modification loan or some kind of restructuring.

If you do have to hire a bankruptcy attorney, then you need to know that it won't be cheap. The average cost to hire an attorney for a Chapter 13 Bankruptcy is $2,500. It is expensive to go into chapter 13 and save your home. If you make enough income to keep your home through a bankruptcy, and you've built up significant equity in your home, it would be worth it to go through a bankruptcy in order to save it.

Your final option in avoiding foreclosure is a short sale. If you find that your home is not worth what you owe on it and you don't have much equity built up in it, then it may benefit you in the long-run to sell your home in a short-sale. It is especially advantageous if you are only in default and have not yet gone into foreclosure with your lender. It is often not that complex or drawn out, either.

The decision is up to you on how you avoid foreclosure. Take all the precautions available to you to mitigate foreclosure and do whatever you can to keep it if it's worth it to you. If not, do what you can to get it sold in a short-sale. Nowadays, lenders are much more likely to agree to one.


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