How to Avoid Foreclosure

Sad but true, just about everybody has trouble managing their financial obligations at one time or another. This can be especially frightening for homeowners, since they risk foreclosure if they get behind in their house payments. If you fall into this category, there is help available. Read this article for a few tips.

Foreclosure is what happens if you can no longer meet the payment schedule on your home loan. The lending institution repossesses your home and sells it to someone else. There are three options that you should know about. The first one is to try to keep it. The second is to sell it yourself; using the money to repay the loan and any extra fees you’ve accrued. The third option is to let the lender proceed with the foreclosure. It will then be your responsibility to pay any difference between the price they got and what you owe.

If you fall behind on payments and begin to receive letters from your mortgage company, most importantly, NEVER ignore them. Instead, call the number provided on the letter and talk to a representative, explaining the reason why you fell behind. Just as with you, the mortgage company wants you to keep your home. After all, foreclosure is a hassle for them, expensive for them, and not something they want to do. Therefore, they will usually work closely with you to provide all possible options.

If you are suddenly unemployed, have an increase in monthly expenses, or your salary has decreased, you may be eligible for a Special Forbearance. With this option the mortgage company lets you make lower payments, or even no payments for a certain period of time.

You might also consider a Mortgage Modification. In this case you would refinance your home or extend the time at which the loan is due to be paid off. This option will help you catch up in making your payments. A Partial Claim is designed to help you get a non-interest bearing loan through the Department of Housing and Urban Development (HUD). Your mortgage company would help you with this, and if successful, your loan will become current.

If you start having trouble meeting your payment schedule, before you think about the threat of foreclosure, make a visit to your mortgage company to talk about options. Don’t passively ignore the situation, as you have more than the one option.

Copyright 2006, Gerry Vandewall, All Rights Reserved. This article may be published on web sites or in newsletters provided this notice and the resource box is included without ammendment.

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Gerry Vandewall provides a range of resources at his web site: Foreclosure OK, where you will find information that will help you on many issues about foreclosure. Why not take a look: