Foreclosure is a looming threat to homeowners across the country, but it's not a foregone conclusion. You can stop foreclosure if you act quickly and proactively. The first step is contacting your mortgage lender and receiving an application for foreclosure prevention. Then, you'll need to provide documentation of your financial situation (e.g., tax returns and bank statements) that shows how dire your fiscal distress is. These documents are necessary for qualifying for loan modifications or other options put forth by lenders during interviews with representatives from those institutions.
The first step in the process of stopping foreclosure is to contact your lender. Contact them at least once per week and keep a record of all calls and correspondence so you can refer back to it if necessary.
When speaking with your mortgage lender, be polite but firm about your intention not to give up on the home without a fight. Many lenders are willing to work with homeowners who have fallen behind on payments or have other financial problems, so long as those homeowners are willing to cooperate with their lender's terms for repayment. If this does not work out for you, there are other options available for stopping foreclosure that may involve filing bankruptcy or applying for loan modifications through HUD (Housing & Urban Development).
Next, determine the extent of your fiscal distress. To do so, review your credit report and bank accounts to see how much money you owe. Check your debt-to-income ratio (the percentage of income that goes toward paying debts). If you have no savings, get creative about ways to save money and increase income.
A foreclosure prevention application is a request, often made online or via phone, asking your lender to consider options other than foreclosure. Once you complete the application, it's sent to your lender for review. If the lender agrees that you qualify for assistance, they'll work with you on a payment plan and try to help you avoid foreclosure.
If you're denied by your lender (or don't get a response from them), contact an attorney or housing counselor as soon as possible with any questions about what steps are next in stopping foreclosure on your home!
Some of these documents can be easily obtained, like bank statements and tax returns. If you need help obtaining them, your lender will be able to assist you. If you have had a bankruptcy or are in the process of filing one, provide copies of the court documents as well.
If you've had a mortgage for a while and are facing foreclosure, your next step is to attend an interview with your lender. Having these interviews is usually optional, but if you attend one and negotiate terms for a new mortgage, it can make all the difference in whether or not your property gets foreclosed on.
One option is to try for a loan modification, which means that the lender agrees to change some of the terms of your mortgage (such as lowering monthly payments). If this doesn't work out, then try for a short sale: selling your house at market value so that it covers what's owed on the property's balance sheet (called "principal").
Finally, if none of those options work out either...it might be time to start looking into deed-in-lieu of foreclosure (DILF). This means giving up all rights over ownership of the home while still paying off any remaining debt associated with it—and sometimes even getting paid by someone else who's interested in buying it off them and taking responsibility for those payments themselves!
If you are facing foreclosure, don't ignore the problem. If possible, act as soon as you receive an initial notice from the lender. The sooner you act, the better your chances are for keeping your home.
Don't wait for a second notice to arrive before taking action. By doing so, you will be able to have more control over what happens with your property and potentially get help from the lender in finding a solution that works for both parties involved.
If you are struggling to make payments on your home, it is important to contact your lender and ask for help. Foreclosure can be devastating for families in many ways, but it doesn't have to be. Your lender will work with you if you contact them before things get too far out of control. You should also know that bankruptcy is another option available if other measures fail.
