How to Avoid Home Foreclosure

How to Avoid Real Estate Foreclosures - Your first step is to call your mortgage lender. If you are having a difficult time paying your mortgage on time, it's important to call your lender immediately, before things can get bad which can lead to a real estate foreclosure. Your biggest ally if you encounter difficulty paying your mortgage on time is often your lender.

Your mortgage lender has options to help you stay in or sell your home. These options include forebearance, repayment plans and loan modifications as well as relief under the new Federal housing plan. You can find their contact information on your mortgage statement or coupon book.

Working With Your Lender to Stop Foreclosure

When you call your lender, be sure to have your account information handy and be ready to give a summary of the financial problems you are having. You should also have recent income statements and your household budget with you.

Be prepared for more than one conversation. Your lender may require that you complete a "loan work-out" package you may not be eligible for help without it, so complete it as soon as you receive it.

Recommended questions to ask mortgage lender:

How much time is the lender willing to give you to complete a work-out?
What are your obligations under the work-out package?
What are the specifics? Be sure to ask what is due and when.
Will a foreclosure sale of your property be put on hold while your lender looks at the possibility of a work-out package?

How to prepare for the telephone call with mortgage lender.

Be ready to provide a short explanation of why you are unable to make your mortgage payment. Did someone lose a job? Is there a medical emergency? Are you current on your loan but have not been able to refinance into better terms?

You’ll also need to provide your servicer with important information about your property, income, and debt obligations.

Being prepared for this conversation will help your servicer understand your case and see if you qualify for a loan modification or other mortgage workout.

If you need assistance and cannot reach your servicer, you can contact one of the local HUD approved counseling agencies in your area.