8 Ways to Help You Save Your Home From Foreclosure

If you are reading this you are probably one of the millions of homeowners that are genuinely concerned they might lose their home. You are not alone, there are more americans in or facing the possibility of foreclosure than at any time in our countries history. This obviously is a very stressful and confusing time and can even seem hopeless to a lot of homeowners. There are actually more options available to the homeowner now than ever before. Here are some tips that will help you learn the steps you need to take and how to determine which option is best for you and your individual circumstances.

1. Talk to your lender: The most important thing you must do when you find yourself in a financial hardship is to communicate with your lender. Let your lender know what your situation is and that your home is of the upmost importance to you and you are doing every-thing in your power to correct the situation. Then follow that up by asking if they have any ideas or recommendations. This will let you avoid the biggest mistake that people commit, which is to ignore or not respond to notices and inquiries from their lender. By being proactive it tells your lender that you are committed to your home and to responsibly examine all of the possible options available to correct the situation.

2. Know your time frame: Knowing the amount of time that you have is crucial in helping you determine what options are available. Primarily there are two factors that you need to research. One is to learn what your lenders policies are, as to at what point do they initiate foreclosure proceedings. Secondly knowing what your rights are in accordance with the laws in your state. No matter what stage of the foreclosure process you are in there are programs available to help you save your home.

3. Assess your financial condition: In order to decide what strategy to choose it is imperative that you do an in depth evaluation of your monthly budget. Make a list of all your monthly financial obligations. Then make a list of your monthly expenses. Things like food, gas, cleaners, clothing expenses, and any other necessities that you have. Then total up all of your monthly income and subtract your bills and necessities from your income and this leaves you and your lender with the amount of your monthly disposable income. This is the amount from which your lender will be able to calculate the amount you can afford in a mortgage payment.

4. Do your research: Because of the epidemic of foreclosures there are more avenues of resolution for homeowners than ever before. So doing your research to find out what is the best option for your individual circumstances is paramount. This information will also help you to decide whether you will be able to do it on your own or if you will need to retain professional assistance. There are a lot of manuals and training information available on the internet. Be sure to find the most up to date information because it changes rapidly.

5. Prepare a hardship letter: Prepare a hardship letter which explains how and why and what hardships have occurred for you to arrive at the situation you are currently in. You also want to include what you have done and what has changed to correct the problem. You can find all the forms that you need on the internet. The hardship letter should be filled out in depth so your lender can better understand what caused your delinquency and what steps you have taken to insure that it will not reoccur.

6. Open negotiations with your lender: Contact your lender armed with your budget analysis showing how much disposable income you have available after you meet all of your financial obligations. Also, you will need your completed hardship letter. Share these with your contact and evaluate how willing your lender is to enter into a negotiation with you to resolve the situation. They have multiple ways to help with the delinquent amount. They can set up a payment plan or add the amount onto the principal amount. They can do a loan modification or lower your interest rate.

7. Pay what you can: Many homeowners think if they can't make a complete payment they can't make any payment. This is counterproductive on several levels. One is that the amount you are delinquent will grow more rapidly. This also accelerates the time frame on how long you have before the foreclosure process begins. By making payments of as much as possible it shows the lender your commitment to meet your obligation and can delay the notification of foreclosure. It also reduces the amount that you have to reconcile if your mortgage is reinstated or at the point of resolution of the foreclosure.

8. Always respond on time: At all stages of this process it is extremely important to respond to all requests for information promptly and accurately. Most importantly, it is crucial to your ongoing relationship with your lender to follow through with providing them at the agreed time, all requested information and materials. Failure to do so will inevitably stall, hamper, or end a negotiation faster than anything else.


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