Have you a been ignoring the warning letters and telephone calls from your
bank? If you are, you may find yourself in the middle of a foreclosure
crisis. What will you do? Where you will live? Can you afford to move?
Before you let fear take over, it is important to know that foreclosures
can be stopped. Although this process is not easy, it can be done.
It is advised that you speak with your financial lender as soon as you find
yourself experiencing financial difficulties. For example, when you get
laid off or fired from your job, schedule an appointment to meet with your
lender and develop a plan, before any problems arise. At the very least,
communication should be made when you start receive intent to foreclosure
notices. Even if you have a sign on your home stating that the foreclosure
process has officially begun, you can still talk to your financial lender.
In this instance, the sooner you do so the better.
As for why you should talk to your financial lender, even at the last minute,
they want to avoid foreclosure as much as you do. Often times, lenders lose
a considerable amount of money on the sale of foreclosure homes. If you can
prove that your financial troubles are only temporary, your lender may give
you a reprieve. They may stop the foreclosure proceedings for you. As for
what can lead to this, you or your spouse getting a second job can help.
If you are dealing with a locally owned and operated bank, which you have been
a loyal customer of, it is important to outright ask what can be done. Offer
suggestions yourself, if you do not receive them. Could you continue making
all future mortgage payments on time, but develop a payment plan for your past
due amount? Can you only pay interest for the time being? Can you be given
time to sell your home, as opposed to simply just losing it? These are all
important questions that you should ask.
Another way that foreclosures can be stopped, in most states, is with a
declaration of bankruptcy. However, this step is one that should not be made
on a whim. It is first important to meet with an attorney specializing in
bankruptcy. If you file for bankruptcy will the foreclosure proceedings stop?
Can you make it so that your home is not considered an asset in bankruptcy
proceedings? If so, this is the avenue that you may want to take. However,
since bankruptcy can negatively influence your credit, it should only be used
as a last resort.
Before you take any action with the hopes of stopping foreclosure, you need to
closely examine the situation at hand. For starters, would you like to get out
from under your property? If it is a money-pit that needs constant repairs, it
might just be easier to go the route of foreclosure or even outright allow
your bank to sell the property. If you want to keep your home, make sure that
you can honestly do so. It is recommended that you take forty percent of your
income and apply that towards your living expenses, this includes mortgages and
taxes. If this isn’t possible for you to do, the avoidance of foreclosure now
may result in the process starting again in a few months.