How to Avoid Foreclosure

Help is available now more than ever!

QUICK TIP #1: Communicate with your lender

Many people lose their homes because they are too ashamed to act, or they go into denial about the seriousness of the problem. To prevent foreclosure, be decisive and explore all solutions. Contact your lender at the number on your statement at the first sign of trouble-even if you have not missed a payment but you think you might have to in future. Your lender will make notes about your phone call in your account file. Reputable lenders and loan servicers should view your contact as an indication that you are committed to fixing the problem rather than avoiding it. The lender may begin discussing possible solutions to your payment problem.

If you have already missed a payment and have not contacted the lender yet, do so immediately. Do not ignore letters or calls from the lender! The longer you wait to act, the fewer options you will have.

QUICK TIP #2: Use your assets

Do you have assets-a second car, jewelry, a whole life insurance policy-that you can sell for cash to help reinstate your loan? Can anyone in your household get an extra job to bring in additional income? Even if these efforts don't significantly increase your available cash or your income, they demonstrate to your lender that you are willing to make sacrifices to keep your home. If you can predict you'll have serious, irresolvable payment problems in the foreseeable future that could lead to foreclosure, consider selling your home before you go into default.

QUICK TIP #3: Dos and don'ts for homeowners facing foreclosure

Don't:

• Run from the problem

• Sign anything that you do not fully understand.

• Deed your property over to anyone. Signing your home over to someone else does not relieve you of your mortgage obligation.

• Let someone assume the loan without the lender's permission and without their formally releasing you from liability for the mortgage.

• Move out of your house because someone promises to make the mortgage payments for you.

Do:

• Call your lender, real estate professional or property management company

• Get financial counseling

• Be suspicious of anyone who contacts you with a loan or service they promise will solve your money troubles and save your home.

• Avoid high-pressure lenders, or those who encourage you to pay an upfront fee for any service or loan, borrow more than the value of the home, or take on a loan without considering your ability to make the payments.

• Get all terms and promises in writing.

• Be on the lookout for terms that change or are not disclosed at the beginning of the loan process.

• Avoid any refinancing loan with exorbitant fees, a stiff prepayment penalty, an excessively high interest rate, or a balloon payment due. (If you're not sure whether the loan you're being offered includes any of these abusive terms, have someone you trust review them for you.)

• Check for complaints about any company that offers to buy your home. Contact your state's consumer protection office (click here to find your office) or your state's real estate regulator (click here to find your regulator).

SOURCE:  Sandy Wright - Marketing and advertising executive, graphic designer and the lead singer in the band, Maddy Rose and SoulMix....www.lyricmarketing.com