How to Prevent Home Foreclosures

Millions of people are struggling to prevent home foreclosure, and most lenders and mortgage companies want to avoid the expense of home foreclosures. Foreclosure procedures vary in each state, but there are things people in every state can do to prevent foreclosure.

Difficulty: Moderate

Instructions

1. Prevent home foreclosure by contacting your mortgage lender right away. Don't wait until the last minute. Clearly explain your situation to your lender. Keep detailed notes of your conversations, dates and times. Write down the name of the person you speak with during each conversation. Have all your financial information readily available such as monthly income and expenses. Depending on your situation, your lender may be able to work out a modification plan for your home loan. There are many different types of loan modifications. Check with your lender for details.

2. Contact the Housing and Urban Development Department to help prevent foreclosure. Depending on your state, there are several ways the Housing and Urban Development Department can help you prevent foreclosure. The link for the Housing and Urban Development Department is in the resource section below. Click on information by state, guide to avoiding foreclosure, and keep your home, know your home links on the main page.

3. To prevent foreclosure start looking for ways to reduce monthly expenses and increase monthly income. Go over your monthly expenses in detail and find ways to cut back. Cancel subscriptions. Look for ways to lower utilities. If you have credit card debt, contact creditors and ask for interest rate reductions. If possible, rent out a room. Search for additional part-time work.

4. If it's not possible to keep your home, consider doing a deed in lieu of foreclosure to prevent home foreclosure. A deed in lieu of foreclosure means you give your house back to the lender, and the lender, in turn, does not follow through with the foreclosure process. Make sure the foreclosure is not on your credit report, and make sure to arrange enough time with the lender to vacate the house. Doing a timely deed in lieu of foreclosure will prevent a foreclosure from going on your credit report. A foreclosure on a credit report can be as bad as a bankruptcy. A home foreclosure stays on your credit report for seven to ten years.

5. To prevent home foreclosure bring your payments, late fees, and penalties current. Contact your mortgage lender and ask for a "reinstatement statement." This statement will have the amount due and a payment due date. Pay before the due date. A reinstatement statement should also include a breakdown of past due payments and fees. Fees vary but are typically the total past due monthly payments, late fees of approximately six percent, and $1,500 to $2,000 in legal fees. Send a certified check by return receipt requested through the mail. If possible, make the payment in person.

Tips & Warnings

• Be cautious of companies who promise to save your home from foreclosure. Google search and check out the company on the Better Business Bureau website.

Resources

• Housing and Urban Development

[blingaling]

on 2/25/2009 Excellent article with detailed information and clear steps. This article will help people.