Even as the housing market has seen a bit of an up-turn, many families are still struggling financially, and foreclosure rates are still comparatively high. When hard times come along, there are steps you can take to help protect your investment and possibly avoid foreclosure.
Step 1- Communicate
The worst possible thing you can do when you fall behind on your mortgage is to ignore correspondence from the mortgage company. Taking their phone calls and responding to their letters may seem stressful, but failing to do so will only make things worse. The best thing you can do is to contact the mortgage company yourself as soon as you know you’re not going to be able to make your payment. They may be more lenient if you keep them in the loop, and they may even have ways to keep you from getting behind in the first place. If foreclosure proceedings do take place, you’ll be at a disadvantage if you haven’t kept up with the process, and the court won’t accept not opening the mail as an excuse.
Step 2- Get Help
Free or very low cost housing counselling is available to anyone nationwide through HUD. A housing counselor can let you know what your rights are under the law, what your options are, and even represent you in negotiations with your lender. They will have ideas about how you can come through this hard time with the best possible result. They can educate you about foreclosure prevention, and even help you to organize your personal finances.
Step 3- Reprioritize Your Finances
Getting caught up on your mortgage in order to keep your home needs to be your top financial priority in order to avoid foreclosure. This means you’ll have to cut any unnecessary expenditures out of your budget until your situation improves. Cable TV, gym memberships, and various entertainment expenses need to be eliminated so you can put more of your money towards housing. If you have any assets that you can liquidate, now’s the time to do it in order to keep your home. Sell cars, furniture, or any other items that could help.
Step 4- Protect Yourself
When your home goes into foreclosure, there will be a lot of companies who will come out of the woodwork offering to “help” you with your situation. Foreclosure scams are common, and could end with you losing your home and a lot more. With all of the help available through HUD, there’s no reason to be signing contracts, paying fees, or giving power over your affairs to any third party who may not have your best interest at heart.