Avoiding Foreclosure in Houston - What You Can Do

Avoiding Foreclosure in Houston - What You Can Do

Many people that are facing the possibility of foreclosure don't know what to do or where to turn in order to stop the foreclosure process. In February, 2009 the government announced a comprehensive plan aimed at aiding homeowners that are having difficulty meeting the mortgage obligations. The Homeowner Affordability and Stability Plan authorizes the Treasury Department to spend $75 billion in order to help homeowners remain in their homes.

While the government program is available to aid homeowners, there are steps that you as the homeowner need to take also:

Communication with your lender

Be proactive. When you first start to realize that you will have trouble making your mortgage obligation, contact your lender. Let your lender know exactly what your situation is and why you are having financial difficulty. You need to understand that the lender does not want to foreclose on your property. Banks are in the lending business, not the property owning business. There are many homes being foreclosed on in Houston, Texas and the bank does not want yours to be another one.

Have a plan

Contact your lender's loss mitigation department. It is their job to help you avoid foreclosure on your home. You will need to provide them with your financial information and a realistic plan that you can follow. They may offer you a loan modification, a forbearance, or interest rate reduction; depending on your situation.

Keep detailed records of any correspondence with the loss mitigation department. This contact may not stop foreclosure proceedings, but it will buy you some time.

Seek help

There are many agencies and programs available to help you work out a loan modification. These groups can help you create a budget, prioritize your spending, and advocate for you with your mortgage lender. In Houston, Texas there are many credit counseling services, and community homeowner's assistance programs to help you through the loan modification process. These groups have the expertise and experience of dealing with lenders daily, and know what they are looking for as far as information is concerned.

Understand your options

You can avoid foreclosure in many ways. If your financial difficulties were temporary, and you can make your mortgage payments now, a loan forbearance may be your best option. If your interest rate has adjusted, causing you to fall behind on your mortgage payments, an interest rate adjustment may be your solution. If your house is now worth less than the amount of your mortgage, but you want to remain in your home; your lender may agree to a mortgage modification, decreasing your loan amount, and minimizing their loss in the process.

If there is no way that you can see to stop the foreclosure process, then you may have to take advantage of other options. Deed in lieu of foreclosure is where you sign over the title to your home to the lender to avoid a foreclosure on your credit report. Often the lender will pay you to leave the property in good condition.

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