What If You Are Foreclosed On?
Foreclosure, it’s something that can scare even the bravest. In this world of uncertainty, it can happen to nearly anyone. However, there are ways to salvage your finances and even prevent foreclosure.
If you find yourself in a situation where your lender is threatening to foreclose on your home, don’t panic, there are people out there that desire to help. Odds are that your lender has a loss mitigation department. These departments will meet with and work with you and show you how to fix your problem.
You also need to be honest with your lender, let them know your situation. If they don’t know what’s going on they will be less cooperative and there will be less avenues open to you.
You can also go through a third person party to mediate between you and your lender. You need to be careful with this though because there are many scams out there that want to take advantage of your plight. This is what is known as foreclosure fraud. These types of agencies will give you an amazing offer but instead take your money and run. There are a few guidelines for working with third party mediators:
1) Never trust an agency that finds you. There are ways for fraudulent agencies to get the info of people that are being foreclosed on.
2) Do a thorough background check on an agency you consider using. This will protect you. The Department of Urban Housing and Development keeps tabs on all credit agencies that they are willing to work with, and will know which ones to avoid. From this list you can start a search for the one that is right for you.
Once you have selected who you will work with, you need to gather all the documents and information you can about your finances. It will help you in pleading your case and will make the agencies job easier. You will need to collect bank statements, tax forms, pay stubs, your mortgage agreement, everything.
The real purpose to doing all this is so you can make a new deal with your lender. That way you can keep your home and the bank doesn’t lose their investment.
There are a few other possibilities that you have if you are foreclosed on. It may not be comfortable, but you can ask yourself these questions: do I really need that house? Could I live in a smaller one? These questions will help you to know if you really should fight for this home. It would be wise to contact a real estate agent so that you can look into selling the home and purchasing a less expensive one. This will give you more flexibility and more leverage with your lender.
Another thing you can ask yourself is: how could you get some extra money? There may come a time where working more will save you financially. Maybe you could pick up more shifts at work, or maybe you could get a second job; whatever it takes to stay afloat.
There is also the possibility of selling your other assets. If your car is still worth a lot, you could look into selling that. However it doesn’t need to be a large asset that you sell, you would be amazed at how much money you can make by just selling the little things around your house. Or, if you don’t want to sell you things, you could get creative, do a bake sale or car wash, whatever it takes.
The nightmare of foreclosure doesn’t have to be as traumatic as you expect, there are ways out. There are people out there that are ready, willing and able to help you. Following steps like these and of others will help you through this time in your life.
Now, what about preventing foreclosure? Forbes.com has some awesome advice in this arena. They say that it is never too soon to start preparing for a financial disaster. Thier biggest tip is to reevaluate your budget, making it tighter, and therefore giving you the ability save more money. If you can save a six to eight month’s worth of income, it will be sufficient enough to carry you through financial floundering.
The point is that your life, your finances are in your hands. You can change and control your situation. There is no reason to lose hope in the torrent of debt. With our ever changing world, there are things you can do to keep yourself afloat.