Foreclosures existed before the recession; however, the recession has certainly sharpened the sword for many people. Credit cards were used more at the pump early last year as gas prices spiraled out of control. For some, that was the icing on the cake, as six months down the road the credit card companies and mortgage lenders were competing for paychecks. If the outlook appears bleak and foreclosure seems inevitable, don’t give up without a fight. Many people today who play their cards right, are actually getting encouragement and cooperation from lenders.
Why would lenders be willing to work with home owners? The recession can be blamed for that as well since the value of homes repossessed is significantly less than the balance due on the loan. In some instances, the repossession of one property could actually cost the lender.
So how do you fight back? Begin by killing them with kindness. Be polite and courteous when the lender calls to inquire about a non-payment or late payment. Most importantly, take the call or open the mail and communicate with them to explain your situation. Most individuals do not want to answer the phone if they know it’s the lender calling because they are embarrassed. Do not let pride stand in the way of keeping your home.
Seek credit counseling before it’s too late. One does not have to be in foreclosure to receive credit counseling. If you’ve felt the crunch on two or three payments consistently, that’s a warning flag to seek help now. The sooner help is obtained the less likely foreclosure will become a reality.
Long-term issues often affecting the ability to make mortgage payments in full and on time may include: the loss of a job, divorce, or health problems. In these cases, contact the mortgage lender to explain the situation. Then request a modification to the loan where a fixed interest rate may be applied or other method of reducing the monthly payment.
Another option is asking the lender for a forebearance plan. This is merely a predetermined amount of time extended to bring the account current. Many mortgage companies allow forebearance plans depending on the situation and if the borrower (you) are asking for help and communicating with the mortgage company, the chances are good that a forebearance plan will buy enough time to explore additional options and avoid foreclosure.
While communicating with your mortgage lender may not guarantee you of your removal from the foreclosure pool, it would certainly be a waste if that’s indeed all it took for you to keep your home.
