If you've been kept awake at night by the thought of "how to stop a foreclosure on my home", you're not alone. It's been estimated that one in 200 homeowners are in serious risk of foreclosing on their properties. The good news is that there are actions and alternatives that you can take to prevent foreclosure.
First of all, you should t
ry to build up your savings in case of emergencies. Every home owner needs at least one to three months worth of mortgage payments PITI (Principle, Interest, Taxes and Insurance) in savings just in case of hardship plus your other obligations.
Secondly, make sure that you have established a home equity line of credit. This is a form of revolving credit in which your home serves as collateral. If something happens to come up that threatens you with foreclosing your home, you'll need to have access to money quickly. It's been estimated that at least 90% of foreclosures could be prevented or delayed if home equity lines of credit were previously put in place.
Do everything in your power to not miss a mortgage payment. Skipping a mortgage payment is considered to be much more serious issue than missing any other type of monthly payment. So if you have to choose, skip a utility bill or credit card payment. Just missing one payment is a big blow to your credit. So take out a loan before you miss the payment, not afterwards. You might not be able to get a loan after one payment is missed.
Ask for help from friends and family. Yes, it is embarrassing--but not as embarrassing as getting kicked out of your home.
Discuss any problems with your lender. The lender seems to be viewed as the bad guy when a home owner had financial problems. But in reality, the last thing that your lender wants is to foreclose on your home. They will do what they can to help you make your payments.
Look your problem in the eye. The common tendency is to just pretend that this isn't happening and avoid doing anything about it, or just plain giving up. Face up to your problem and try to find solutions. And remember, you DO have options. In fact, there are quite a few options which will allow you to keep your house and stop the foreclosure proceeding without paying all of your arrears (payments that you have skipped) at once. There is even the possibility to reduce what you owe on your property by significant amounts. The sooner you act, the more choices you will have.
If you do have money to spend, spend it on your mortgage payment. Once you've missed a mortgage payment for a few months, the lender may require you to make all your back payments at once. This is the start of going downhill. Make the choice to not pay other bills and pay your mortgage instead. When forced to choose, most people would pick losing their credit cards over losing their homes.
Hopefully these have given you some answers to your thought of "how to stop a foreclosure on my home".
If you find your self in a jam and there is no way to keep making those mortgage payment, because of a loss of income or other reason that's beyond your control then you may qualify for HAFA (Home Affordable Foreclosure Alternatives) Short Sale. Under HAFA, you may even be given a $3,000.00 in relocation assistance.
The good news, there's always alternatives to foreclosure and for a FREE consultations, please don't hesitate to reach out to us for help as you're not alone...
Jaime Charouf, CDPE, REO, Loan Originator, Financial Professional, Broker/Owner
For All Your Real Estate, Mortgage, and Insurance needs!
EZ Realty & Investment Group, Inc.
Office: 954-318-1110 Cell: 305-458-2944
Emai: jaimec@ezfunding-realty.com
Some Very good tips to pass onto those that need help in a pre-foreclosure.
This is the perfect post to help those who need to know what to do when they are facing a foreclosure. Thank you!
Thank you guys, it's really sad to see people all over the country loosing their homes in foreclosure and some don't even seek any help or guidenace...I think we the Realtors and Mortgage Pros, need to educate more the public about the differnt alternatives that they have instead of doing nothing!
Great information. There are still many people in this situation and this could be helpful.
It's definitely much easier to avoid foreclosure if you take the first defensive steps before a payment is missed.
Jaime, Great blog post. Very informative info. Thank you for your post.
A great informative post... Keep it up.
Great information for people who are struggling with a difficult situation. Often people freeze up and don't do anything and that can be the worse thing they can do.
Seems like getting a HELOC would be very difficult if the owners are starting to have some pain about paying their first. Borrowing on the second to pay the first is a rough deal.
Great advice--and with so much advice to be given for free, that there should be some type of help for everyone.
Thank you to all for all your comments!
Jay and Michelle, for a homeowner that currently have equity in his or her home...it will be a great idea to get a HELOC even if they don't have a need to use it at the time when they get it but to have for any future financial problems as a back-up. Usually, people have financial issues becouse of a loss of employment that can last for a couple of months or so till they find a new job and the HELOC can pull them thru those couple of months!
Very informative post about foreclosures, thanks for sharing.
Great advice Jaimie! Folks sometimes don't listen but you are right, NEVER EVER miss a mortgage payment if at all possible.
Jamie - this is very good information and I am sure that folks facing foreclosure will find these suggestions very helpful.
A very true statement that you have to pay the mortgage above any other bill you may have. It is considered the biggest sin to miss a mortgage payment. Your blog points out that we should always be prepared for the worst and have equity lines of credit. THANKS for a very good blog.
I have to agree with your post the secret is to not get in a situation where you can find your self upside down on your mortgage. So the only point I would change is the Home Equity Line , that where most home owners lose it. No Home Equity Line. I also fell that all the programs out there to prevent Foreclosure are just stalling or kicking the can down the road. If you can afford the mortgage today, you can't afford it tomorrow. Kick the Foreclose program in to high gear and sell the homes to qualified buyers and lets get out of this mess, 5 year is way too long to be in this type of situation.
Very informative, thank you for sharing!
Don't rollover for these banks. Fight them! Some of them are dumb. They got themselves into this mess and now they just want to sweep it under the rug, while you lose your home. Hire an attorney and make the bank work, they don't want to work, they just want you to give up. I know of one case a home owner filled out documentation for a loan modification for the bank and never rec'd an answer from the bank. The bank even sent him a letter saying they have everything they need. Crazy.
Good advice for mortgage borrowers. A high percentage of defaulting home owners never contact their lender and that could be a big mistake.
Hi Jaime-good advice-I have seen more than one situation where the owners play this non proactive role and are in denial.
And if bad turns to worse, you can immediately halt a foreclosure with a Chapter 13 bankruptcy, and make up any back mortgage payments in the bankruptcy, and keep your home.
Thank you for all your comments and the intenet is to reach out to those who needs some guidance...