How to Stop a Condominium Foreclosure
If you worry that you might lose your condominium to foreclosure, know that you're far from alone. One in every 45 U.S. households received a foreclosure filing in 2009, the highest that number has ever stood, according to online foreclosure data company RealtyTrac. If you're falling behind in the mortgage payments on your condominium, you can seek help from your lender to stop a foreclosure.
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Things You'll Need
- Copy of your most recent federal income tax return
- Copy of your two most recent paychecks
- Copies of your credit-card statements, showing how much you much pay each month
- Copies of your student, car and other loan statements
- Copy of your most recent mortgage loan statement
Instructions
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1
Gather the financial documents that you'll need to prove to your mortgage lender or bank that you can no longer make the mortgage payments on your condominium. These papers include copies of your two most recent paychecks, if you are still receiving any; copies of your student, car, personal and other loan statements; copy of your most recent federal income tax return; copies of your credit-card statements, showing how much you owe and your minimum required monthly payments; and a copy of your most current mortgage loan statement.
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2
Call your mortgage lender or bank at the number provided on your mortgage loan statement. Explain that you can no longer afford your mortgage payments and that you'd like a loan modification to avoid foreclosure.
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3
Explain why you can no longer make your payments. Some valid reasons include an illness or injury that has kept you from working, a recent job loss or a drop in annual income because your employer has slashed your working hours.
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4
Write a hardship letter if your bank or lender needs one. This letter should list the reasons why you can no longer afford your condominium mortgage payment and that you'd like a loan modification so that this payment drops.
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5
Send the hardship letter and the financial documents you compiled in Step 1 to your lender, who will study them to determine if you qualify for a loan modification.
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6
Agree to a specific type of loan modification if your bank or lender approves your request. Your lender might offer to drop your monthly interest rate, reduce the principal balance you owe on your loan or lengthen the life or your loan, all of which can lower your monthly payment.
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Tips & Warnings
Many lenders and banks are participating in the Home Affordable Modification Program run by the federal government. This program provides financial incentives to encourage lenders to modify loans to prevent homeowners from losing their residences to foreclosure. Ask if your lender or bank is participating in the program.
