There are many steps homeowners can take and resources they can tap into to prevent a foreclosure situation. Not only does foreclosure mean the loss of the home and relocation, but it also has significantly damaging impacts on credit histories and scores, which can make it difficult to secure housing in the future.
The U.S. Department of Housing and Urban Development has pages and pages of online advice and resources for homeowners at risk of foreclosure. A few of their suggestions include:
Communicate with the lender
As soon as there is any concern about missing or making an incomplete mortgage payment, homeowners are encouraged to contact their lender and request assistance. Many lenders have short-term programs to help homeowners avoid defaulting on their loans. Open all correspondence and answer all calls from lenders, as avoidance will likely make the situation worse.
A foreclosure is a long, tedious, and costly process that most lenders want to avoid. While it may feel awkward to discuss financial distress with your mortgage lender, they are often best positioned (and best motivated) to assist homeowners. The lender may temporarily reduce interest rates, allow skipped payments that are added to the end of the loan or change other terms of the loan to make payments easier for a short-term period.
Find the funds
Homeowners at risk of foreclosure are advised to take a realistic inventory of cash flow and assets. What funds can be accessed to ensure the mortgage returns to a current state and stays current? Is there anything that can be quickly sold? Can the household be tightened for a few months? Are there retirement savings that can be safely accessed to save the home?
Consult an attorney
A foreclosure is a complex legal proceeding that is challenging to navigate without support. Homeowners with legal representation of your can make timely decisions that allow the best possible outcome for their unique situation.
The HUB website also reminds consumers to beware of scammers and be skeptical of individuals or organizations who claim they can make a foreclosure go away. To get proper guidance on how to prevent or navigate a foreclosure, speak with a qualified attorney or find a HUD-Approved Housing Counseling Agency