The US Department of Housing and Urban Development has some good advice for people that are in danger of losing their home through foreclosure. Here are a couple of items from that list, with some discussion.
- Don’t ignore the problem. “The further behind you become, the harder it will be to reinstate your loan and the more likely that you will lose your house,” the site goes on to say. Regardless of what the problem is — health problems, alcoholism, addiction, or financial problems — it’s human nature to be in a state of denial about what’s happening. Realizing that the foreclosure is likely, and then dealing with the issues involved, may get things back on track. The earlier, the better.
- Contact your lender as soon as you realize that you have a problem. “Lenders do not want your house. They have options to help borrowers through difficult financial times.” With more and more mortgages becoming upside-down — meaning that more is owed on the house than what it would likely sell for — lenders really don’t want your house if there’s the possibility that they’d lose money on it. New legislation, for better or worse, is in process for them to receive funds to help homeowners keep their houses out of foreclosure. Again, the earlier, the better.
- Open and respond to all mail from your lender. “The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems. Later mail may include important notice of pending legal action.” The news from your lender won’t get any better if you stop paying them. This gets back to the top tip on the list: Don’t ignore the problem! Just because the mail is unopened doesn’t mean that there isn’t a problem.
I’ll do a couple more posts adding to the HUD’s great tips, but if you want more right now, check them all here.