Obtaining Foreclosure Help And Stopping It From Happening

Having your home foreclosed is probably one of your worst nightmares

. The dread of having to let go of your home may take its toll not only on your financial but also emotional well-being. Foreclosures rarely happen in the blink of an eye. Normally you may be able to see the warning signs at least a few months before it may take place. If you find yourself missing more than three due payments, you might want to start taking all necessary steps and get the foreclosure help you may need to possibly stop it from happening. If you act quickly enough you might be able to save your home from being foreclosed and prevent your credit report from being damaged.

Foreclosure help generally starts with you. Many people panic once they see signs of possible foreclosures happening in the near future. Even worse, some people may actually sink into a state of depression as they regard having their homes foreclosed as a sign of weakness and failure. It might not do you any good to sit back in fear or act as if nothing is wrong. Fear is natural. But you may need to overcome your fear, dig into your finances to understand what went wrong in order for you to come up with a solution that may benefit you financially as well as emotionally. Even doctors need to diagnose the problem before prescribing the needed medication. So it may be a good idea for you to review your original mortgage including your income and budget. You may need to be objective in order to come with a realistic assessment of your own financial situation.

If you find that you are unable to understand most of the terms in your original mortgage and you feel that you probably need professional assistance in understanding your financial situation, you may have the option of contacting a housing counseling agency approved by the US Department of Housing and Urban Development (HUD). You may find some so-called agencies guaranteeing that they could stop your bank from foreclosing your home for a certain fee. It is advisable that you check if they are vetted by the HUD because there have been cases where people facing foreclosure have been scammed by such guarantees after paying hundreds of dollars to those so-called agencies.

Your housing counselor may advise you to contact your lender as soon as possible and explain your financial situation to them. Lenders generally dislike foreclosing properties due to the fact that they rarely get their money back even after paying such high costs of foreclosing. So they may probably be more than happy to assess your problem to see if it is temporary or permanent and may try to work out a payment solution that you can afford that may also benefit them in the long run. The solution may depend on whether your financial situation is temporary or permanent. If it is temporary, they might offer to freeze your payments until you can resume doing so or reschedule a repayment program to make up for the payments that you missed until you are caught up.

There may also be long term solutions such as modifying the terms of your loan entirely by extending your amortization period or perhaps reducing your interest rate or converting it from an adjustable to a fixed rate. However you may have to be careful because in many cases mortgage modifications may only make matters worse as you may end up having to pay more monthly than you would in your original mortgage.

If all else fails, you might want to consider selling your home to stop foreclosure from happening. You may not be able to sell your home at its full value but in general your bank may accept an amount less than what you owe. It may be tough for you to have to let go of your home but at least it would not cause a permanent dent on your credit report.

Many banks or lending institutions may be willing to work out a plan with you because they probably hate foreclosures as much as you do. So you might want to be a little bit more proactive and show your creditors that you intend to do your best to pay off your mortgage.

by: Ask Bill

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