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Take action now – do not procrastinate
If you want to get out of this problem, you need to face it square on. There is no going around it and the longer you ignore it, the more difficult it would become for you to find a workable solution. Here are a few steps that could help:
- Re-negotiate terms and conditions – contact your lender and explain succinctly why you are not able to keep up with the installments. Do not go with only the problem, but also with a proposed solution. Ask them to accept a lower installment, permit a short sale, or any other solution that would bail you out and offer them a fair return. Be careful to highlight the fact that you want to honor your debt and you are regretful about the fact that you are unable to do so. Most lenders would be open for negotiations.
- Obtain legal advice – sometimes foreclosures are triggered by the fact the lender had misrepresented the data pertaining to the loan. Ensure that you know your rights. In case this is found to be true, you save not only yourself from foreclosure but also you would be entitled for damages.
Find appropriate help
- Find counseling – often, saying is easier than doing. Approved counselors from US Department of Housing and Urban Development (HUD) would be an excellent choice for you as a source for help. Here you can find accurate and up-to-date information about legal protections, your rights and most important how to manage your finances from now on.
- Avoid foreclosure prevention companies like plague. There is nothing these companies can do that you cannot do for yourself, without having to pay a hefty fee for “help”. Educate yourself with the help of approved counselors and research.
Check out all the possible bailout options
- Extreme situations demand for extreme measures. Make a list of all the things you can do without in order to deflect the cash towards the foreclosure problems. The list may consist of selling your jewelry, cashing into insurance policy, selling your car, anything that could buy you some time.
- Think about ways to bring in extra cash flow – maybe you could take a second job; maybe you could start your business on the Net; maybe somebody else in your home could take up a job to complement the family income. Asking for hand loans from parents, relatives or friends might be another solution. Cutting out all the extraneous expenses for a while and focusing on putting money aside for the mortgage would also help.
Online resources
- http://www.hud.gov/offices/hsg/sfh/econ/econ.cfm - this is the website of US Department of Housing and Urban Development where you would find a wealth of information about how to avoid foreclosure. You would also be able to find the closest counselor to where you live.
- http://www.usnews.com/articles/business/real-estate/2008/08/07/how-to-avoid-foreclosure-rescue-scams.html - one of the most important aspects to avoid foreclosure is to recognize rescue scams. This is an article that would open our eyes.
- http://portal.hud.gov/portal/page?_pageid=33,717348&_dad=portal&_schema=PORTAL – this is the Federal Housing Administration website where you would find some very valuable tips to save your home.
- From the Wall Street Journal - even houses featured in the show Extreme Makeover are going into foreclosure!
