Overview
Foreclosure takes place when home owners do not pay their payments to the
lender. It really is that simple. The reason for why home owners may not be
able to make the payments, however, can be anything but simple.
The worst thing home owners can do when they cannot make their home loan
payments is to ignore the problem and to ignore the lender. In many cases,
lenders will be more eager to help you through the problem than to foreclose
on your home. The truth is most lenders do not want to take your home from
you. Foreclosure is a cost to them and it reduces the profits they can
realize from a home loan.
It cannot be said enough: If you are unable to make your mortgage payment,
do not ignore the problem. The more payments you miss the harder it will be
for the lender to work with you. There will come a time (should you ignore
the lender for too long) when foreclosure will be the only remedy.
Once you know that you cannot make a payment contact the lender. As
mentioned above, most lenders do not want your home. Most lenders have
programs available to help you out if you contact them soon enough, but many
of these programs are time sensitive and must be triggered before certain
cutoff dates arrive.
If you have missed a payment do not ignore the mail that you get from
lender. You might be surprised at how many people simply do not open their
mail when they know they have missed a payment. Ignoring the mail will not
make the situation any better.
In many cases, the first notices you receive from the lender will offer
information on payment options and foreclosure prevention options. If you
ignore these and do not contact the lender you will begin to get the more
demanding mails which may include important notices of pending legal
actions. Not opening your mail will not be a legitimate excuse in
foreclosure court.
Another important thing to do is to understand your mortgage rights. You
should find your loan papers and read them to learn exactly what the
contract states, along with timelines. You can also learn more about the
foreclosure laws and timeframes in your state. Keep in mind that every state
is different so be sure you read the laws for your state.
You can also contact a HUD-approved housing counselor to help you understand
your circumstances. The U.S. Department of Housing and Urban Development
(HUD) offers free or very low cost housing counseling nationwide. These
counselors can assist you to better understand the law and your options.
They can help you organize your budget and finances and may even be able to
represent you in negotiations with your lender if you need this level of
assistance. You can find a HUD-approved housing counselor by calling (800)
569-4287 or TTY (800) 877-8339.
There are many options for those who find themselves in financial trouble
but it is up to you to take the actions that will help prevent foreclosure
on your home. Home owners may be surprised at how many programs are
available to help them as they get through this trying period of time, but
they should keep in mind that ignoring the problem will only make it worse.
One of the best ways to prevent foreclosure is to get to work with the
lender as quickly as possible.