Avoiding foreclosure is possible even when you’re right down to the wire before actually losing your home. You need to contact your lender and let them know what your problem is. If you are having a financial hardship the bank will attempt to work with you since they don’t want you to default on your mortgage either.
You have defaulted when you’ve missed your mortgage payment and thirty or more days have passed since the due date. If this does happen, the bank will contact credit reporting agencies and your credit score will be adversely affected. Your score will remain that way even when you do bring your loan current and are successful at avoiding foreclosure. Defaulting affects your future credit rating.
Sixty to ninety days after you have defaulted, the bank will notify you of impending foreclosure. At this point, unless you can come up with all fees and late charges as well as bringing your payments current, avoiding foreclosure is not possible and the bank will post a public notice. If foreclosure takes place, the bank will be selling your home at auction.
Avoiding foreclosure really starts with some careful planning before you run into financial problems. When you first took out your mortgage you probably planned with care, saved a down payment and determined that you would be able to make those regular monthly mortgage payments. Unforeseen circumstances of course put a different spin on everything.
Avoiding Foreclosure: What to Do
As soon as you suspect you might not be able to make the mortgage payments, notify your lender immediately so they can work with you. They may extend your grace period or allow you, for a limited time, to make partial payments. If you have a true financial hardship you might also avoid fees and late charges.
It is very important to do all you can early on to get the money together to bring those mortgage payments current. Take a look at all your available assets or consider ways you can bring in some extra income. Do you have a family member that would be willing to help you in this circumstance?
We all have things happen that are beyond our control including loss of job or sudden illness. Hopefully some careful planning and insurance will take care of most problems that arise, but if you do find yourself confronted with financial difficulties and unable to pay your mortgage, you need to face the problem head on. Avoidance is not the answer. Keep the lines of communication with your lender open. They can be your best source for information on available options and programs that can help you in avoiding foreclosure.
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