How To Avoid Foreclosure Consequences

It often takes years to save enough money to purchase your own home

. Combine that with ongoing monthly payments, insurance and taxes and most people are spending about one-third of their income, or more, on their home every month. Few things are more disheartening or frightening than to be told that you are facing foreclosure. Economic uncertainty including job loss, divorce or illness are some of the common reasons that homeowner's may be facing foreclosure. However, there are some things that can be done to avoid the consequences of foreclosure.

Contact your lender

One of the first steps in successfully avoiding foreclosure is to call your lender. They may have loss mitigation options that they can discuss with you. Keep in mind that lenders are not in the business of owning real estate and it is in their best interest to come up with ways to help you keep your home including loan modification if necessary.

Understand your rights

Consumers often do not understand their rights when it comes to foreclosure. In addition to the written notification of foreclosure, consumers can and should, ask for their original loan documents if they do not have a copy of them. This will help a homeowner better determine what loss mitigation options might be available to them. Lenders are required by law to provide these documents if they are requested.

Create a profit and loss statement

When you are interested in discussing a potential loan modification with your lender, make sure that you gather the necessary documents. These will often include your most recent pay stubs, proof of other income as well as a complete list of all assets and liabilities. Create your profit and loss statement so that you can discuss potential options with your lender to avoid foreclosure.

When lenders are not cooperating

In some cases, the collections department of your mortgage company may not be willing to negotiate with you or, you may feel they are not negotiating in good faith. If this appears to be the case, it may be a good idea to contact a reputable loan modification attorney to assist you. Not only can they assist you in obtaining documents from your lender, but they can also help you with negotiations if they become necessary.

Don't make arrangements you cannot keep

Too often, homeowners are desperate to keep their homes and will agree to almost anything. Remember, this is simply putting off the inevitable. Never make an arrangement with a lender that you know that you will be unable to meet. While this may stop the initial foreclosure procedure, it will only suspend the process. Remember, when a lender makes a formal request for foreclosure, you are paying for their costs of filing and collection.

Facing foreclosure is life-altering. After years of hard work and sacrifice, you may be looking at the possibility of losing your piece of the American dream. Making sure that you are armed with the facts about the loss mitigation options that are available to you can help you save your home and may also help you avoid some of the other consequences of foreclosure.

by: Alvin Clark

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