Quick Steps to Avoid Foreclosure

If you are one of the thousands of Americans wondering if your home is going to be foreclosed on, you might think that there’s really nothing left to do. The thought of foreclosure is a stressful and disconcerting one, and many homeowners resign themselves to the fact that there’s nothing they can do to avoid foreclosure. On the contrary, there are actually several things you can do to forestall foreclosure. Here are ten quick tips to help you avoid foreclosure.

1. Don’t avoid the problem. Don’t get in the habit of throwing away any ominous-looking mail from your mortgage lender. Face the problem head on.
2. Communicate with your lender. Try not to keep your lender in the dark. Contact the bank at the first sign of trouble and explain your situation. You might be able to work out an alternative payment arrangement.
3. Know your rights. Get out your loan documents and read all of that fine print so you know exactly what your lender can and cannot do if you fail to make your mortgage payments.
4. Think about selling your house. Deciding to sell your home of your own volition is a lot better than being kicked out forcibly, and it won’t wreak havoc on your credit.
5. Look into a short sale. If you can only sell your house for less than the outstanding balance on your mortgage, look into a short sale. A short sale means that your lender takes what you can get for the house and forgives the difference.
6. Don’t get suckered into schemes. You might be bombarded by “foreclosure prevention” companies offering their services for a steep price. These companies are scams, and they are a waste of your money.
7. Get real help. HUD (Department of Housing and Urban Development) has several programs to help homeowners in dire straits. You can also contact a housing counselor licensed by the National Foundation for credit counseling.
8. Keep your priorities in order. Keeping your home and a good relationship with your mortgage lender should be your top financial priority. Sell assets, take on extra work, and eliminate superfluous monthly expenses to help make your mortgage payment.
9. Bankruptcy may provide protection. With a chapter 13 bankruptcy, you would become debt-free, and you might also be able to continue living in your home. This will seriously damage your credit, though, so use it as a last resort.
10. Don’t lose hope. It can be easy to give up when faced with a situation like foreclosure, but you need to stay sharp and motivated if you are going to avoid it. Devote your energy to the things you need to do to keep your home.