Help to Get Out of Foreclosure
Facing foreclosure, and the prospect of being forced to leave your cherished home, can be frightening. And while burying your head in the sand as notices from your lender arrive in the mail may seem easiest, that won't help you get out of foreclosure. To avoid losing your home to the bank, you'll have to take action.
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Getting Help
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If you haven't yet reached out to your lender, do so immediately. Your mortgage company may be willing to work out a solution to help you stay in your home, but the longer you wait, the less willing it will be to help you out. Be ready to explain why you have fallen behind on your mortgage, whether you've lost your job, become saddled with medical expenses or taken on more debt than you can manage.
Early Options
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The options available to you depend on your individual situation, your lender's policies for helping homeowners facing foreclosure and how far along in the foreclosure process you are. If you've just fallen behind on a couple of payments, the lender may be willing to allow you to continue making monthly payments, with a little extra tacked on top to pay the amount in arrears. Alternately, it may be willing to tack on the back payments to the end of your loan, essentially extending the life of the loan. A modification of your loan may also be possible to provide you with more affordable repayment terms.
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Process
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Be prepared to provide plenty of documentation if your lender is willing to provide you with any of the aforementioned options. You'll likely have to furnish a detailed list of your monthly bills and proof of income to show economic hardship. You may also have to furnish tax documents. Often, lenders will require a hardship letter or narrative of the events that landed you in your current situation.
Last Ditch Efforts
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If you ignored early notices from your lender, it may now be too late to qualify for any of the options available to homeowners earlier on in the process of foreclosure. That doesn't mean you're helpless to avoid foreclosure. You have two options at this stage. Do a deed in lieu of foreclosure, also called a voluntary foreclosure. You offer the bank your home voluntarily and walk away with a foreclosure on your credit report, although your score will still take a hit. To accomplish this, ask your lender for the proper paperwork. Alternately, you can try to sell your house for less than it's worth if you are underwater, and ask your lender to forgive the remaining balance. This is known as a short sale.
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References
- Photo Credit house image by Ian Holland from Fotolia.com
