Help Stop Foreclosure

Thursday, June 25th, 2009 at 11:51 pm

Homeowners have many reasons for missing a house payment, such as job loss, medical emergency, family death, divorce, and excessive repair bills to name a few. Some of these can be short-term problems that are easily resolved by making up the payment over a couple of months (with the consent of the mortgage holder of course); but in instances where the loss of income continues over several months, catching up becomes an impossible task.

One way to stop foreclosure is to educate homeowners on the importance of 1) making those payments, and 2) communicating with their mortgage holder in the event that they can’t make the payments. Most lenders can be sympathetic to a homeowner’s situation, but only if they are made aware of them.

In some cases, mortgage holders will work with delinquent homeowners by allowing them to make up missed payments once the homeowner is back on track by adding extra money to each payment until the back payments are made up. Of course, this will affect their credit report showing delinquencies until it is caught up. But if the homeowner has been able to reestablish their financial basis and can make the monthly payments, then they are in better shape to dodge a foreclosure. Just because a homeowner missed a payment is not reason to just stop making any payment whatsoever.

Mortgage holders have also been receptive to working with the homeowner to just take interest payments instead of the whole mortgage payment. Of course, that adds to the life of the loan and additional interest because of it. But if the mortgage holder is willing to let a troubled homeowner make some sort of payment and allow them to stay in the home, it wards off foreclosure.

If the income has changed significantly, sometimes homeowners can refinance their loan in order to lower the payment and stop the possibility of foreclosure. However, again – this is only possible through communication with the lender BEFORE they file intent to foreclose.

As indicated, it is possible to help stop foreclosure, but homeowners need to know the importance of communicating with their mortgage holder and be willing to make amends on their delinquencies as soon as is possible. Never assume that the lender is the bad guy – give them the opportunity to do what’s best for all parties.

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