Steps to take if you’re facing foreclosure, Part 1

Liz Pulliam Weston wrote recently on steps to take if you’re facing foreclosure.  There are smart ways to go about it, and not-so-smart ways.  Here are her first three suggestions with some of my comments:

  • Make a budget.  If there are places that can be cut in your budget that will make the difference between losing the house and not losing it, this is the time to do it!  See if there are ways that you can do the little money-saving things again to make up the shortfall.  Depending on how short-term the shortfall appears to be, it may make sense to keep the mortgage current at the (temporary) expense of other bills.  If it doesn’t make sense to do this, then don’t.
  • Consider getting help from credit counseling services associated with the National Foundation for Credit Counseling or the Association of Independent Consumer Credit Counseling Agencies.  (Members of these organizations abide to standards and agree to oversight by the organizations.)  Additionally, HUD and VA loans have their own assistance and counseling programs.
  • See if you can refinance.  This may be harder to do than it was last year but if you have enough equity it may be possible to refinance and to lower your monthly payment.  This works ideally before the first missed payment but it’s best to look into this before a notice of default has been filed.

The next post will talk about the next three steps in her list.

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