How to Avoid Foreclosure

Posted on: March 4th, 2015 by firstandsecondmortgages No Comments

Something could always happen, you could get sick, your work hours may be cut in half, or you may have to take on the increasingly expensive care of an elderly parent. Something totally unexpected and financially overwhelming may knock you out of balance and shake up your financial situation. You may be able to keep up with the bills for a few months more, but unless the picture changes dramatically, you might miss a monthly mortgage payment very soon.

Mortgage foreclosure is just a step above bankruptcy in the damage that it can do to an individual’s financial record. If you are having difficulty keeping your mortgage payments current, taking action now rather than later may help you avoid foreclosure and the disastrous effects it can have on your family, your finances and your future.

What procedures can you follow to avoid foreclosure?

  • If you predict there will be problems in the horizon, you need to take action immediately. Depending on your situation, the lender may be willing to work out a solution and work out a repayment plan for missed payments. Notifying your lender that you may miss a payment will show that you are on top of things and trying your best to meet the terms of your loan.
  • Negotiate your repayment plan– you might be able to negotiate one if you are late on your mortgage but can prove that you can set things right within a reasonable period. The delinquent amount would be distributed over a specified time, with part of what is past due added to the monthly payment.
  • Modify your loan – This change the terms of your mortgage, with the goal of getting payments current and making them affordable.
  • Keep good records. Keep notes of all your conversations, documents and interactions with loan counselors.

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