How to Settle a Pending Home Foreclosure

When a lender finances your home mortgage loan you are using your house as collateral. If you are unable to keep up with your monthly mortgage payments, the lender can, and will, start foreclosure proceedings. If your mortgage is foreclosed on you will need to move out of your home and the foreclosure will go onto your credit record.

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Instructions

- 1
  
  Open all correspondence received from your mortgage lender. If you get behind on your loan payments your lender will contact you to discuss the situation. If you avoid the lender, he will start legal actions leading to foreclosure.
- 2
  
  Contact your lender as soon as you know there is going to be a problem keeping up with your mortgage payments. If you know a payment is going to be late or you are going to miss a payment entirely call your lender to let her know. Mortgage lenders are much more willing to work with customers that are being cooperative about the problem.
- 3
  
  Discuss alternative pay off solutions with your lender. If your financial problems are temporary the lender might be willing to consider allowing you to temporarily pay only the interest on the mortgage each month or skip a few payments and add them onto the end of the mortgage term. If your financial problems are long term the lender may agree to renegotiate the loan terms or help you to get a one time interest free loan from your mortgage guarantor to get your mortgage payments current.
- 4
  
  Talk to a housing counselor. A housing counselor can help you to evaluate your financial situation and determine your options. The housing counselor can also contact the lender on your behalf to work out a solution for the problem and stop the foreclosure.
- 5
  
  Sell your home yourself before the lender has time to foreclose and then use the money from the sale to pay off the home mortgage loan. If you allow the home to go into foreclosure the lender will sell it for whatever he can get for it and you will still be responsible for the balance on the loan. Selling the home yourself may allow you to get more for the home and will prevent the foreclosure from becoming part of your credit rating.

Tips & Warnings

A home foreclosure will stay on your credit rating for seven years, making it difficult, if not impossible, to get another home mortgage loan.

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How to Settle a Pending Home Foreclosure

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