Going through a foreclosure is an extremely stressful ordeal to go through. Due to the housing crisis more homeowners are facing foreclosure now than ever before.
Some say that foreclosures are the homeowners fault for taking a loan they could not afford to pay back. Others say it’s the banks fault for loaning money to people for homes they knew they couldn’t afford. Either way, home owners are facing foreclosure for a wide variety of reasons. These include: losing their job due to the recession, getting sick while not having health insurance or an interest rate increase from an adjustable rate mortgage. No matter the cause of the foreclosure, you can avoid being foreclosed on if you are proactive about your situation.
You’ve heard that the best defense is a good offense? This applies for home loans as well. Do not ignore your situation hoping that the problem goes away. It won’t. In fact, it will get worse. If you know that you will be unable to pay your mortgage, contact them and let them know ahead of time.
Banks are familiar with families going through a financial hardship. These types of situations are not uncommon in today’s economy. Be honest and up front with your mortgage company. If you have lost your job. Tell them. If you are going to be late with a payment. Let them know.
You can also inquire with your lender about doing a loan modification. Whether it’s an in-house modification or one through the government like HAMP, you can get your payments reduced for five years, giving you enough time to get your financial situation in order.
The banks may be greedy money hungry institutions, but right now, trust me they don’t want your home. The banks have far too many homes at the moment. The banks are having to sell homes at auctions for far less than what they’re owed. Because of that, the banks would rather work something out with you so that you keep your home and they keep getting paid.
In closing, be proactive and be honest with your bank about your situation. Sometimes planning ahead and working with them can ultimately lead to you keeping your home.