How To Avoid Foreclosure

Can a person learn how to avoid foreclosure on a house? Is it possible to discover how to stop foreclosure once the process has begun? Better yet, can one prevent this from being an issue in the first place? Happily, in all three cases an affirmative answer is possible. Information is available to deal with many important financial aspects of home ownership. In matters relating to foreclosure, speed is essential, and can make the difference between success and failure, between keeping and losing that place called home.

Of course, it is better to never miss a mortgage payment. In fact, this should be avoided at nearly all costs. In an emergency, it may be possible to miss a payment or two on unsecured credit cards or utilities and still be able to remedy the situation fairly quickly. (However, even this practice is not recommended, since an increasing number of credit card agreements stipulate that if a customer misses a payment to any creditor, increased interest rates may be imposed on the account, even if a customer has never missed a payment with that card!) If a person misses a mortgage payment, however, this is an entirely different matter altogether. While the first situation is like feeling a strong tremor and going outside to investigate, the latter is like running from a full-blown volcanic eruption. There is literally no time for indecisiveness or procrastination if the goal is to learn how to avoid foreclosure.

Ideally, a person should have at least three months of expenses set aside in savings to provide a safety net in times of uncertainty. Even normally responsible people can be felled by a job loss or health problem, a death or natural disaster. What happens then? How can a regular person deal with an upcoming mortgage crisis and learn how to stop foreclosure? Rather than hiding ostrich-like from financial difficulties or giving in to depression, the matter must be faced head on and with courage. Thankfully, a Christian has this comfort from God's Word : "In the day of my trouble I will call upon thee: for thou wilt answer me." (Psalm 86:7)

If someone is experiencing difficulty in paying his or her mortgage payment, the last thing anyone should do is ignore the matter. The problem will not go away by itself. The only things that will go away by choosing to disregard phone calls, letters, or legal notices about the mortgage are your options. Despite the normal tendency to fear that if the true situation is made known to the mortgage company they will immediately begin foreclosure proceedings, the truth is that they do not really want the house as much as they want the payments on it. Also, businessmen realize that in the real world, people will sometimes experience financial difficulties for various reasons. Know that the mortgage company already has in place options on how to stop foreclosure from being the only solution to the problem. If such options are not pursued and the mortgage company does not hear from a customer, after a very short period of time they will conclude that foreclosure proceeding must be begun. At that point the choices of how to avoid foreclosure will be very limited.

Take stock of the situation. Are there any assets to be sold, or can a second job be obtained to meet expenses? Perhaps there are certain items like cable service, entertainment or a second car which the family will have to give up for awhile. Also try to determine if the financial setback is temporary or if another long term solution will be needed. If the difficulty is of a temporary nature, it may be possible to arrange with the mortgage company a way to repay the overdue funds over a period of time, or to 'skip' a payment by having them add the funds back on to the principal, thus extending a little breathing room. Some companies have special policies for dealing with customers who have been affected by natural disasters or whose financial problems arise from the fact that they have been involved in a military deployment.

If a person is seeking how to avoid foreclosure, there may be the temptation to pay off smaller bills to lessen the number of creditors being dealt with at one time. This may make the individual feel better, but is actually not the best strategy. It would usually be better to lose the credit card than to lose the house. If one is trying to figure out how to stop foreclosure on the house, these funds may be needed to accomplish that purpose. Even if a customer can not repay the entire mortgage payment, a token payment will at least indicate the intention to repay the debt, and the payment may be just enough to keep the mortgage company from beginning foreclosure proceedings.

Do not fall victim to foreclosure scams. The money spent on such schemes is better spent by putting these funds towards the mortgage payment. An individual should never sign any legal document with such firms before checking with an attorney to be sure that the house is not being signed away. Even if a company is legitimate, any information they might be able to give you about how to stop foreclosure or the options available in your particular case can be found for free by contacting the state's Housing Office. The U.S. Department of Housing and Urban Development (HUD) makes available free or low cost counseling about how to avoid foreclosure, and will help to organize finances or even represent a customer in negotiations with the lender.

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