Help With Foreclosures: What to Do if You Are Facing A Foreclosure

November 11, 2019 by Susan Paige

There’s no denying that going into foreclosure is incredibly daunting. 

If you’re in the process of foreclosure, you’re certainly not alone. In fact, 1 in every 215 homes in America faces foreclosure. While instances of foreclosure have minimized since the housing crisis, it’s not entirely uncommon.  

If you need help with foreclosures, you’re going to want to read this. We’re sharing six useful tips on how to deal with foreclosure and minimize the pending damage.

While there’s no denying that foreclosures are daunting and stressful, this doesn’t mean that it has to be the end of the world. Read on to learn how to cope with your pending foreclosure today. 

  1. Educate Yourself 

First things first, it’s essential to understand exactly what’s going on. 

The foreclosure process is notorious for taking a long time. This means that time is generally on your side for you to understand how the process works and what exactly is taking place. 

In short, foreclosure takes place when a mortgagor fails to pay the necessary payments on their home. In return, the lender takes possession of the mortgaged property and the mortgagor has to move out. In most cases, this lender is the bank. 

In order to ease the pain of your foreclosure or prevent it from happening, it’s crucial to understand what exactly foreclosure is from the beginning. 

  1. Call Your Lender 

Next, it’s time to get in touch with your lender. 

While there’s no denying this might be an uncomfortable phone call, it’s absolutely essential. After all, your lender is going to provide advice on what to do next. They’re also going to have valuable insight as to why this is happening and what you can do to prevent it. 

During this phone call, they are going to provide you with a number of options. Your particular options are going to depend on your particular situation. 

Remember, your lender is likely willing to work with you throughout the process. Just like you, they’d prefer to find a solution outside of taking your home. Together, you can work to move forward and find yourself back on steady ground. 

The key to a good working relationship throughout this process is to be as honest and upfront with your lender as possible. 

  1. Discuss Refinancing or a Repayment Plan

When you meet with your lender, they’re going to outline a number of options for how you can move forward. 

Of these options, refinancing your loan and creating a repayment plan are the most common. Before moving forward, it’s important to note that these options will not be available to everyone. Your options are dependent on the extent of your scenario. 

With refinancing, the lender will offer a new loan to cover the missed payments and your remaining balance. This loan is likely to have different rates and terms than your initial loan. 

With a repayment plan, the lender will recreate a payment plan that works with your realistic budget. With this, you’ll restart making payments and work toward paying back your late payments. 

  1. Schedule an Appointment for Foreclosure Counselling 

The thought of facing foreclosure alone is never easy.

After all, the process of foreclosure can be confusing and the rules are often changing. Amongst all of the stress and anxiety, it’s easy to feel overwhelmed and let a pending foreclosure get the best of you. 

In these moments, it’s important to remind yourself that there are services and people that are willing to help you. Foreclosure counselors will help you deal with the stress throughout the process and help you understand how to prevent the process from worsening. 

In many cases, these are free services and consultations that offer sound advice. After meeting with a counselor, you’re going to feel more informed and empowered to move forward and make the best decision possible. 

  1. Consider Bankruptcy 

In 2017 alone, nearly 500,000 Americans filed for bankruptcy. 

While there are plenty of reasons that one might choose to do so, having a home in foreclosure is certainly one of them. Filing for bankruptcy doesn’t magically make the foreclosure to go away. However, it does help to delay the process and rid of your debt in the meantime.

Once an individual has filed for bankruptcy, an “automatic stay” is imposed on your assets. When this takes place, creditors are unable to pursue their collections on your assets.

This also puts a temporary stop on the foreclosure process. While the foreclosure is still impending, it gives you time to determine how you’re going to proceed. 

In any instance, filing for bankruptcy should not be taken lightly. When someone chooses to file for bankruptcy, this is typically because all other options have failed them. In many ways, bankruptcy is often considered to be the last resort. 

  1. Consider a Short-Sale

Last but not least, you may want to consider a short-sale for your home. 

The thought of selling a house in foreclosure can be daunting. In this scenario, many homeowners consider a short-sale for their homes. This involves selling the home for less than what the owner owes on the mortgage. 

In order to do this, you’ll need to attain the permission of your lender. With this, your lender can choose to accept or deny your invitation. This is because the lender will often end up receiving a smaller payoff than originally anticipated. 

Once you have an offer, it’s your lender that will decide whether to deny, accept or counter the offer. In most scenarios, the home will eventually sell for significantly less than it’s worth. Unfortunately, this is just the reality of selling your home as a short-sale. 

Help With Foreclosures 

If you’re facing foreclosure, you know firsthand the stress and anxiety that come alongside such a process. 

In your weak moments, try to remember that people have survived foreclosure before. In understanding how the process works and in working alongside a professional, you’re going to be able to survive this. 

While you’re lying awake at night, be sure to use this guide for help with foreclosures. If you follow these steps, your stress and anxiety levels are sure to be reduced throughout the process. 

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