Avoiding Foreclosure – Control Your Finances

There are many reasons why you may about to be in the middle of foreclosure proceedings. Job loss, divorce or sudden medical bills are but a few of them. You may have originally received a very low (and temporary) interest rate on your mortgage, which is now so much higher that you can’t make the payments. Regardless of the cause, it is important to take a matter-of-fact look at the situation, be as knowledgeable as possible and then take action.

In these difficult economic times, you may have to make some changes to your life and financial plans in order to keep from losing your home through foreclosure. The first thing to do is to be aware of your situation. You should know long before your bank does that you will have financial problems coming up. Don’t wait until they begin foreclosure proceedings. It’s generally too late at that point.

Take a long and hard look at your spending patterns. Be realistic. Are there things you can cut back on so that you can make your mortgage payment? It’s possible that the lifestyle change is only temporary, assuming that the cause for your problems will be rectified soon.

Similarly, do you have assets that have some market value? You may not want to part with your expensive watch or jewelry, or trade down you car to a cheaper one, but if it keeps you out of foreclosure, it may well be worth it.

Understand your mortgage and your obligations under it. Read the documents that you signed once again. They are probably long and complicated documents, but go over them anyway. Mortgage and foreclosure laws vary from state-to-state.

Get on the internet to study relevant subjects. There is no shortage of online assistance. In fact, a recent search of the word “foreclosure” yielded almost thirty-nine million hits, and that’s on only one search engine! Not all of it will be useful to be sure, but there will definitely be a lot of pertinent information for you. Become as knowledgeable as you can about the subject.

Then, meet with your lender. Again, this ought to be as early as possible. If you have already missed several payments it is not too late, but it is better if you can start a dialog with a clean payment record. Your lender may have some ideas that will help you, including refinancing or loan modifications, but they will be easier to implement if your payment history still looks good.

The government has recently instituted several programs designed to delay foreclosed homes, hopefully for long enough to resolve any existing financial problems. The Department of Housing and Urban Development (HUD) is very knowledgeable and has free or low-cost assistance services available. You can easily find them online.

Be very careful of companies that claim to be able to prevent foreclosure. You should stay away from any company that makes this claim. Each case is different and no company can realistically claim in advance that they can prevent foreclosure for you. A reputable company will never claim they will prevent foreclosure. Rather, they will help you understand the process so you can find the solution that’s best for you.

Original: Avoiding Foreclosure