This is some good information on some of the steps that should be taken
to help avoid going into foreclosure. There are some links attached that provide
Original Source: How To Avoid Going Into Foreclosure
Facing a potential foreclosure? Well, in today’s real estate market, you are one of many. Ever since the job market started going south, foreclosure rates all across the country have continued to climb. Let me give you a few tips to try before the bank takes away your home.
Don’t Feel Embarrassed And Put Your Head In The Sand
The best thing you can do to avoid a foreclosure is confront the problem early. If you just lost a job, have huge medical bills, or you know your mortgage is about to go up do to an adjustable interest rate. Get in touch with your bank and do it now before it’s to late.
The first step to avoiding foreclosure is to take action. Chances are if you’re reading this, you’ve already missed some house payments. The best thing you can do is contact your mortgage holder/bank and find out what options you have.
Many banks today are working with homeowners to avoid foreclosure. They don’t want to foreclose on your home if they don’t have to, it costs them too much money. Talk to your bank about working it out.
Ask for a forbearance which will allow you to stop making payments for a while as long as they add the lost interst back into your loan. You can also ask to re-structure your loan if it’s about to get a larger interest rate.
They may increase your loan payoff time in order to skip some payments, they can also let you pay interest only until you get back on your feet. It never hearts to ask, but not asking can leave you homeless.
Contact A Government Approved Foreclosure Avoidance Counseling Company
One of these peices of legislation is called Homeowner Affordibility and Stability Plan (HASP) which allows some homeowners access to Making Home Affordable (MHA) loan modifications to refinance or lower monthly payments.
These agencies provide services free of charge so you don’t have to worry about paying for the program. There is NO need to pay a private company for these services.
If you’re receiving a bunch of letters in the mail claiming to help you avoid foreclosure if you pay an upfront fee burn them. These are scams. Do not pay anyone money upfront to negotiate with your bank. Period.
You can find a counseling agency that has been approved by HUD by checking out the list at:Foreclosure Avoidance Counseling. You can also check out HOPENOW.com a website that provides support and guidance for distressed homeowners.
Talk To A Professional About A Short Sale
If you have a valid hardship, and the banks won’t budge on your loan terms, a short sale could be your next step. A short sale is where the bank allows you to sell your home for less than you owe on it.
Because home prices have dropped since the bubble in 2005, more and more homeowners owe more than they paid on their homes. Because of this, short sales are becoming quite popular in today’s real estate markets.
When you’re looking for a short sale agent, be sure to get an agent that has a proven track record for short sale success. You do not want to get an agent that is clueless to the process.
I would also recommend talking to a real estate attorney who is experienced with short sales. There can be numerous legal problems when dealing in short sales, and you should always get legal advice from an attorney, not a Realtor.
Find out the tax implications from a CPA (Certified Public Accountant) and never assume you won’t have to pay back money on a short sale. The only person you should ask for financial or tax advice from is an accountant, not a Realtor.
Prepare Yourself Emotionally
Having people in your life that you can talk to may not help you avoid foreclosure, but it will be a blessing during these tough times.
Foreclosure is extremely stressful. Not knowing what will happen next or where you’re going to live is up there with the worst. But keep in mind, it’s not the end of the world.
It’s a chance for a new beginning, and a chance for you to rearrange your lifestyle. A minimalist lifestyle is good for the soul, and it will give you time to evaluate the next steps in your life.
I hope you found these tips helpful for your situation, but please talk to your bank as soon as possible. You never know what you can work out until you try. Good Luck!