How to Prevent Foreclosure if You Are Having Money Problems

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By Sarah Wilson CCRP
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Prevent Foreclosure if You Are Having Money Problems

Talk continues about the current housing market, struggling homeowners, foreclosures and foreclosure fraud. Different situations apply to different homeowners. Not all of them purchased homes they could not afford. Some refinanced for debt consolidation and made bad refinancing decisions. Others are dealing with unemployment. I personally know of several skilled professionals who were out of work for more than a year. They took jobs at Target, Walmart and other retail stores but were not making the salary they were accustomed to at BellSouth or the pharmaceutical companies. According to the Federal Housing Administration, fondly referred to as FHA, options are available to help these people avoid foreclosures. I hope these tips will help somebody save their home.

Difficulty: Challenging

Instructions

Things You'll Need:

Paper and Pen
Computer
Internet Access
Phone

Step 1

Assess your debt.

Write down everybody you owe. Make a list of who you pay, how much you pay and your current (or last) salary.
Step 2

Contact creditors.

Inform your creditors about the unemployment or decrease in income. Some will offer assistance immediately and explain options available to you. For example, a neighbor got laid off and she sat down to contact the creditor. They deferred two payments for her until she could get money to pay. Some worked with her, others did not. The point is, you need to make the first effort and keep a diary of who you contacted, the name of the person you spoke to, and what was said.
Step 3

Contact a credit counselor.

You do not have time for predators and like it or not, there are people who thrive on others misfortune. They are waiting to take as much as they can from you while you are down and unable to think clearly. To avoid these people, go to FHA or Housing Urban and Development (HUD)websites. You can also find a counselor at www.hopenow.com . HOPENOW is partnered with FHA and offers counseling assistance to homeowners who are unable to make mortgage payments. They help you work out a budget and payment plan that is good for you until your situation improves. Creditors do not want to foreclose so try to work out a deal that you both can live with and a counselor maybe able to help you do that.
Step 4

Be open and honest.

Some of us are embarrassed to find ourselves in a “dependent” situation. In 30 years, we have never had money problems and now this. Deal with the reality of the situation, set pride aside and get help. To get the help you need, you must be honest with yourself and the counselor. Mortgage lenders and creditors can only help you if they have the facts to make sound decisions. Some may want your financial statements such as checking account statements, Tax Return statements, etc. Pull all of these papers together and get them ready in case they are requested.
Step 5

Act now.

Every piece of information I read when researching this article placed emphasis on the importance of acting immediately. The further behind your payments get, the more difficult it will be to resolve the problem. So pull your documents and thoughts together and pick up that phone. Even sending a letter is better than doing nothing.

Good luck.

Comments

laurie1979 said

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on 8/8/2008 Thanks for posting this article. My hon got into real estate investing with the wrong person who screwed him over. I'll let my hon know about it.