10 Tips to Stop Foreclosure – Recession-Proof Your House in 2020

10 Tips to Stop Foreclosure

10 Tips to Stop Foreclosure

 

Recession-proof your house with these 10 tips

Look, it happens to the best of us.

A lot of times, it’s not even our fault.

I’m talking about missing a payment here or there because of unpredictable medical bills. What does the bank expect? 

Do they want us to stop breathing? 

Here you will learn the best TIPS to avoid foreclosure…

However,

You have to spend 3 mins and 36 seconds reading it… Right?

Do we agree?

Best 3 mins ever, if it saves your house.

So you miss a few payments–  next thing, the bank is knocking on your door saying they are going to sell your house right from underneath you.

The unfortunate truth is if you don’t make mortgage payments on your house, a foreclosure could occur. And this happens quite regularly. 

 1 out of every 200 homes will be foreclosed upon. 

In fact, in 2010, it wasn’t good! ABC reported that the banks sold 2.9 million houses because of foreclosure.                                                                                                        

Holy S#%!

 2.9 million houses!

That’s crazy. Obviously, that was really high then, the great recession and all, but foreclosures still happen way too often today.

So after the bank sells your house, you are no longer allowed to live there. If your house is worth less than how much the bank sells it for – guess what? They can still come after you for the difference. 

THEY TAKE YOUR HOUSE, AND YOU STILL OWE THEM MONEY! 

This is called a cold deficiency. Cold indeed! Some would say heartless. 

It is probably the least of the concerns by this point, but I have to mention it because it is serious. A foreclosure definitely puts a big hit on your credit score and limits your ability to borrow money or get credit in the future. 

So here are some great tips for you to avoid foreclosure.

The Financial and Emotional State of Homeowners Facing Foreclosure 

FACT: Homeowners fail to contact their lender because they are embarrassed, don’t believe the lender can help, and/or believe it would cause them to lose their home more quickly. – Freddie Mac/Roper poll of 2,031 U.S. homeowners, conducted 2005. 

I can’t tell you not to be scared. 

I can’t tell you not to be angry or embarrassed – however.

I can tell you that if you can get past this, put it aside for just one minute, and reach out to your bank, the problem WILL NOT get worse.

Let me say that another way…

If you contact your bank, it will give you options. They WILL try and work with you. It will make it easier. 

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  1. Definitely do not ignore the bank.

If you ignore this problem, it will only get worse. Believe me, I know. Just like the IRS, the amount will only get bigger and the letters more demanding. It’s a terrifying spot to be in. 

FACT: Every three months, 250,000 new families enter into foreclosure. – Mortgage Bankers Association 

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  1. Call and speak to your lender as soon as possible. 

Believe it or not, banks do not want your house.  They make money by lending money, not by owning houses.  There is a good chance the bank will work with you to restructure the loan.  They have options to help get you back on track. 

You have to take the first step through and get in touch with them…NOW!

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  1. Respond to any communication from your lender.

Normally the letters you receive after missing one or two payments offer advice on contacting them and negotiating a new loan payment plan.  They want you to pay them back, so they will work with you to help you do that. As time goes on, the letters will become more nasty–  pending legal action, court appearances. You can avoid that by keeping lines of communication open.  It is tough to do this. It hurts, but this is how you can stop your house from being foreclosed on. 

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  1. Understand your rights.

Your mortgage rights are in the loan documents that you were given when you signed the loan. Reading these documents will also explain what your lender may do if you are late making your payments. For example, how quickly they may try and sell your house

ƒ Six in 10 homeowners wish they understood the terms and details of their mortgage better. – Freddie Mac/Roper poll of 2,031 U.S. homeowners, conducted 2005. 

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  1. Know your options to stop the foreclosure.

You can find excellent information on actual government websites that teach you your options. 

https://www.usa.gov/foreclosure

https://www.hud.gov/topics/avoiding_foreclosure

They talk about things like refinancing, restructuring, and even bankruptcy filing. 

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  1. Contact a government worker assigned to help you.

The U.S. Department of Housing and Urban Development (HUD) has “housing counselors.” They will help you learn your options, help with organizing and arranging negotiations with your bank. You can find counselors assigned to your area on their website.

More than 6 in 10 homeowners delinquent in their mortgage payments are not aware of mortgage lenders’ services to individuals having trouble with their mortgage. – Freddie Mac/Roper poll of 2,031 U.S. homeowners, conducted 2005. 

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  1. Analyze your spending.

Take a look at what you are spending your money on. It will not be easy. You will have to tighten your belt, but you need to get serious about cutting your bills. Saving your house has to be a top priority. Maybe you will have to pause your gym membership or cable tv for a bit. Some sources go as far as suggesting to delay payments on credit cards or other debt that is not tied to your house.

FACT: 43% of American households spend more than they earn each year. Home-ownership Preservation Foundation data of 60,000 homeowners

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  1. Look for other items you can – assets.

Maybe you don’t need the second car or some jewelry you no longer need. This really hurts! But you have to make hard choices about what is important right now. Your second car or your house? Maybe it will be enough to demonstrate to the bank you are trying and enough to get you over this current hurdle and back on your feet. 

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  1. DO NOT USE FORECLOSURE PREVENTION COMPANIES!

They charge you money. They have no way to make the loan go away. You have  100% free help if you use the government counselors or talk to the bank yourself. Talking to the bank might be intimidating, but they are already threatening to take your house.  It can’t be worse than that, right? 

It may make you angry, but you have to hear what they have to say, and you have to take the time to tell them what is going on in your life. 

You are not the first person to be in this situation. The banks have worked with people before.  Give them the chance to work with you. 

Once again, HUD has counselors if you want to talk to somebody on your side.

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  1. Be very cautious – DO NOT get scammed. 

No one can stop your foreclosure except you!  If you are contacted by a person who claims they can make your foreclosure go away immediately, they lie to you. 

They are trying to scam you. The only person that can make your mortgage go away is you. 

They may ask you to sign a document saying that they can act on your behalf. This is a scam.

If you get such a document – show it to your bank. They will tell you what’s going on. 

Never sign a legal document without reading and understanding all the terms. Once again, you could share anything like this with the FREE HUD counselor. Website: https://www.hud.gov/.

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If you or someone you know is in this situation, it is very stressful. Sometimes you will not be able to give them answers, but you can tell them you care. You can tell them it will be ok. It will seem like these words fall on deaf ears. Or the person may even lash out at you angrily say, “how will it be ok?”

Be there for them. I know exactly what it is like to have the sky falling because of financial pressure from personal experience.  Every day it seemed like my mind was filled with dark black stormy clouds. It wasn’t pleasant. I was lucky. The storm I could see in my mind went away. I did not lose a house.  

From this experience, I can say it is essential to keep trying. Talk to the bank. Keep going to work— one step at a time.  If you are reading this in this situation, you may not seem like good advice.

All I can say is this is what I did, and it worked for me. 

If you know anyone that may benefit from this simple advice, please share it with them.

Thanks for reading.

SM

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