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Foreclosure Tips

 RED HOT  TIP    

A Guide to minimizing foreclosure impact  

Are you behind on your house payment?  Are you facing foreclosure? What can you do to stop the foreclosure or at least stall the process to give you time to make up the payments?  

Foreclosure is a process that allows a lender to recover amounts owed on a defaulted loan. Any time you are delinquent (30 days late) on a mortgage payment, the lender has the right to start foreclosure. His sole interest is to minimize his loss on the loan. Therefore, he should be more than willing to work with you to save the loan and avoid any loss. However, many state laws require a waiting period to encourage negotiations and settlement. The normal waiting period is 3-4 months.   

We are currently running over 2 million foreclosures per year which is a major cause of the current recession. You are not alone in this situation. This is a major problem that the federal government needs to address quickly.   

The reasons vary for the boom in foreclosures. They include losing you job, sub-prime lending practices and rates, reckless spending (over buying) the sudden drop in house values making the value of your house less than the loan. The technical term is you are “under the water”.  

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Now for the tips!!!  

·         First and foremost, contact your lender and ask them to help you find a solution.  

·         Look into re-financing as a way of catching up on the payments.  

·         Develop a strict (survival) budget with the house payment your priority.  

·         Only consider bankruptcy as a last option - be careful as you can end up with nothing.  

·         Check out any possible government help during these hard times.  

·         Watch out for “help” scams .  

If you are interested in additional information on Foreclosure, budgeting, or bankruptcy, consider purchasing a business almanac.