How to Keep From Going Into Foreclosure
A creditor with a lien on your property can foreclose to obtain money to pay off your debt. Foreclosure usually happens when you miss your mortgage payments, violating your contract with the lender. The lender then takes your property and sells it, retaining the sales proceeds to pay off your loan. Even if your lender has begun the foreclosure process, you can still stop it.
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Instructions
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Go over all your loan documents to determine the type of mortgage loan you have, the amount you still owe and the contract terms that apply to your situation.
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Minimize your expenses and increase your income to keep up with mortgage payments. Eliminate expenses you don't need, for example cable TV and gym memberships. Take on a second job or sell your valuables to raise cash.
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Contact your lender's loss mitigation department as soon as you find it difficult to make your mortgage payments. The sooner you seek help, the more likely you can keep your house from going into foreclosure. Explain why you can't afford your mortgage and show supporting documents, such as your tax return, pay stubs and bank account statements. Every time you receive a letter or notice from the lender, read it and respond to it by certified mail, if necessary. Keep a copy of all the written correspondence between you and the lender.
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Call a housing counseling agency that has been approved by the U.S. Department of Housing and Urban Development (HUD) if your lender refuses to work with you. Your counselor can advise you on available options and help you talk to your lender. You may be able to get free counseling.
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Tips & Warnings
Be wary of foreclosure avoidance scams. Fraudsters sometimes promise to get you a better loan, help you qualify for government programs or eliminate your debt.
References
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