Home foreclosure can be avoided

All you have to do is call; Lenders are usually willing to avoid home foreclosure

The booming real estate market of the last five years has come at a bad time for many would-be homeowners. Stocks are down, employment is uncertain and everyone who used to invest in stocks is now investing in real estate. This has driven prices to previously unknown levels when many people just want a place to live. Despite the introduction of risky option ARM mortgages, many buyers are struggling to make their house payments. This has led to an increase in home foreclosures, as employment uncertainties and risky lending practices have clashed. Who gets hurt? The homeowner who loses his or her home. How can this be avoided?

Contrary to the plots of old movies, most mortgage companies are not vultures who are eager to throw families out of their homes. On the contrary, most lenders find it a tremendous burden to initiate foreclosure proceedings against a customer. In fact, most will go to great lengths to avoid it. Lenders understand that occasional financial problems arise for most everyone, and they will often be willing to work out some sort of compromise solution to any problems you may encounter. 

Here are a few options you may have if you find yourself unable to meet your mortgage payments:

• Your lender may agree to allow you to stop making payments for a short period of time, or add the payments to the back end of your loan. They may also offer to restructure or refinance your mortgage in a way that makes it more affordable for you, such as converting a 15 year loan to a 30 year loan.
• If your home is insured by the department of Housing and Urban Development or the FHA, you may have recourse through them. Both departments have insurance that can offer you a one-time opportunity to catch up on your delinquent payments. Contact them for details.
• With the rapid increase in home prices, you may discover that you have far more equity in your home than you previously thought. This may provide a great opportunity to sell the home at a profit. You can pay off your existing mortgage and possibly have money left over for a down payment on another property.
• Your lender may simply be willing to take the property back and sell it. This is a different and separate process for foreclosing, which would forcibly evict you from your home and tarnish your credit record for years. In this scenario, the bank or mortgage company would simply take back the deed and sell the home. This isn’t the ideal solution, but it is a better choice than bankruptcy.

Whatever you do, be sure to avoid the companies that advertise that they offer “foreclosure help.” While they may sound well-meaning, these companies are really run by scam artists that have no intention of helping you. What they want is for you to sign over your property to them so that they can pocket whatever equity you may have acquired over the years. That is the last thing you want.

If you have financial trouble and cannot pay your mortgage, call your lender and ask for help.