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How to Stop Foreclosure

STOP HOME FORECLOSURE Although there are few people who plan to default on their mortgage loan, life happens, and, all too often, we are faced with unexpected expenses, job loss, divorce, or other financial disasters. Although financial experts suggest that we all have a minimum of three months expense cushion in our savings accounts, the reality is that most people just don’t have that much money set aside. But, financial challenges need not cost you your home if you take charge of your financial situation as soon as you realize it has become out of control.

Negotiation Tips to Bring up With Your Lender

The first thing to remember is that your home mortgage loan company really doesn’t want your house. They would much prefer to have their money instead. With this in mind, as long as your financial setback appears to be temporary, your mortgage company will usually be surprisingly happy to work with you to help you retain your house.

Mortgage Lenders Can Offer Flexible Repayment Options

Lenders are actually equipped to handle the temporary financial setbacks that their customers sometimes experience and have devised repayment plans designed to help you regain control of any late mortgage payments.

Negotiate Rolling Payment Plans with Banks

Most of the plans that mortgage lenders use to help you get back on track involve either rolling the late payments to the end of the loan, breaking the payments up over the next few months and paying a certain amount toward the past due balance in addition to your regular monthly payment, or completely refinancing the loan. If your financial troubles are more than temporary, you may want to discuss placing your house on the market or opting for a short sale which can be discussed with your mortgage company.

Act Early

Whichever route you choose, the main thing to bear in mind is to contact your mortgage company as soon as you realize that making your payments has become a problem. By keeping in touch with your lender, you are creating a line of trust that can only help you in the long run.

Comments (10)
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10 Existing Comments
  1. KJones said:
    on July 29th at 02:26 pm

    I have a suggestion in regards to making a little bit of extra money to meet your payments.

    Consider renting out part of your house. Maybe you can convert your den or family room into an extra sleeping space and rent it out to a single person for so much per week, plus a deposit up front. This would be instant cash in your hand and it could be a short contract with the tenant to help you get caught up and also to alleviate any housing problems that your tenant may currently be having in his search for an apartment or house. This will save him money and add money to your budget at the same time.

    You may also ask your church for assistance. They could make a special passing of the plate on you behalf.

    Also, in searching for some side jobs, run classified ads in news papers, post your ads on the internet, and write up flyer to pin up on your local merchants’ free bulletin boards. It would help to include a little bit about your desperation to gain the sympathy of the people considering you for a job. Plus, if you are selling on eBay as mentioned in the earlier blog entry, put your call out for sympathy there as well. I remember a lady selling things on eBay so that she could get enough funds to put a fence around her property and keep her rescue dogs safe. She did well with her sales pitch in expressing her needs, I was compelled to make a purchase from this lady and contribute to her cause.

  2. ciscogrove said:
    on August 1st at 02:05 pm

    I think the above tips are great tips and should be considered. However, as a former mortgage banker here is the hard cold truth.

    If the loan is insured, i.e. VA, FHA, etc. the lender has absolutely NO incentive to cooperate with the borrower. They won’t own the house after the sale, the government will. Just check the HUD web page for foreclosed properties in your area and you’ll see what I mean.

    Because I’ve personally helped many people out of foreclosure when I was a lender, I will say you should be phoning mortgage lenders who specialize in the sub prime, that’s the term for people who can’t pay, loans.

    Despite the recent bad publicity, they still exists and are eager to help you out. In fact, with the market tanking like it is, I just may go back into the business.

    Please don’t overlook this last piece of advice. It may just save your ***. Yes, it’ll cost you a few bucks but that’s better than what the alternative will cost you.

  3. gkr said:
    on August 5th at 02:46 pm

    It was said that every year one million families in the US are faced with the problem of losing their home to foreclosure by the lenders. It is very natural in the current scenario high cost homes to take a mortgage when building a house for living. But over time the cost of life may add up and we may end up being unable to pay the debt on time.

    Always communicate with your lender whenever you know or think that you are going to miss payment or pay late. The lender acknowledges this and may give you a chance to pay late or so. But this can hurt your credit score in the first instance.

    Some times it is possible to negotiate the repayment plans with the lender. The repayment strategy will allow you to accumulate due payments and better pay them over a long period of time.

    If some thing sounds fishy with the lender always check with HUD.gov to verify if the lender is approved to lend mortgages.

    A short sale or selling the house at a lesser than market value will help. But it is the last resort that should be taken.

    Always have a plan for growing your business so that you pay the mortgage on time and even better. Work hard, save money, invest in the market and have multiple streams of income to avoid accumulating debts. As always said prevention is better than cure.

  4. Cindy Gonzalez said:
    on July 9th at 11:09 am

    We offer foreclosure bailout loans in Florida up to 65% LTV, must be owner occupied.
    Visit us @ http://www.HomeInvestorToolBox.com

  5. nina day said:
    on February 7th at 12:54 pm

    Help me find a resource for my situation–I owe 129,000; house is on the market, being agressively marketed by a reputable realtor at 219,000. I am not yet behind on payments, but cannot long continue. Can anyone comment?

  6. Mark said:
    on August 29th at 04:35 pm

    Nina, I don’t understand what you’re worried about at all. If you’re having trouble making the payments, then you need to sell quickly. Obviously, if no one makes an offer at your $219,000 asking price, you will need to tell your real estate agent to reduce the selling price for a quick sale.
    In my case, I owe $177,000 but my house by latest comparisons is only worth maybe $140,000. I am what they call “Upside Down”, as you can see, by at least $27,000. You, on the other hand, must have a house that is worth close to the price your agent is asking for, or he/she wouldn’t have listed it at that price, based on comparisons. Do the math: you have some $90,000 or so to play with, possibly just dropping the sale price of your home.

  7. Rebecca Christiansen said:
    on September 7th at 03:26 pm

    Here’s an interesting situation for you:

    We bought land with two parcel numbers, which is common in our area. When we got a permit for our house, we were told it was two parcels that could be sold separately, after all. So we built two houses and took out separate mortgages with separate banks. When we put the houses on the market separately, a county official called to tell us that we couldn’t sell them separately, after all. The main issue was that one well and one septic system serve both houses. (Everything was permitted, and there are deeded easements for well and septic.)

    Now the market has collapsed. We probably owe less than the houses should sell for, but only very cheap houses are selling at all. Our payments are as low as they can possibly be since they are interest only loans, about 6%. But with property tax and insurance, our housing costs are $5,000 a month. My husband is only finding enough construction work for a few hundred dollars a month, and savings are disappearing fast. We are renting one of the houses, so that gives us about $1500 a month.

    I’ve been trying to see what programs could help us, but nothing seems to fit. At this point, the two banks don’t know that the county won’t let us sell the parcels separately. We can’t refinance the one we’re renting because it’s not our primary residence. We can’t refinance the one we’re living in because a payment got lost, either in the mail or in the bank’s offices, so we were officially late on a payment. A short sale probably won’t work because of the two separate mortgages issue (we also have a HELOC on our residence).

    The only answer I see is to pay as long as we can, then walk away…..Help!!!

  8. j.m. said:
    on July 6th at 12:26 pm

    to the above poster: its meaningless “what a county official told you”. there is no such thing as permission to sell or not sell. there are 2 parcels, duly recorded. “selling” them just means notarizing a deed and recording it. as long as the standard format is maintained they have to record it, and they will, without judgment. no clerk has an opinion, if it was all somehow online and programmed automatically a computer would do the processing. the problem is when human beings get involved they tend to mix their ego and personality with what should otherwise be an anonymous and neutral procedure. there is no such thing as selling, or mortgages or loans. there are pieces of paper recorded at the registry. for evidence in case of future controversy. counties dont let or not let sales happen, they just record documents. all they really is chage the name and other personal info in the computer.

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