These are the three most common reasons why people were not able to prevent foreclosure:
- Decreased income due to unexpected events: death in the family, job loss, or an ailment that stops you from performing your job.
- Lack of complete mortgage understanding: the type and the terms.
- Tricked into acquiring an unsustainable loan.
- Know about President Obama’s 2009 Federal Foreclosure Prevention Initiative.
- Be familiar with the terms and conditions of your loan.
- Know what you can do.
- Do not forget to communicate with your lender.
- Find a trustworthy housing counselor.
- Locate a debt manager.
If you do not want to lose your home and want to prevent foreclosure, you must also know that there are necessary steps you should take to save your home.
You may be eligible for to acquire a modification that can make you home loan affordable, or may help you refinance. It also offers monthly payment reduction plans that hope to completely prevent foreclosure.
Know the difference between fixed-rate mortgages and adjustable-rate mortgages. Based from their names, with fixed-rates you will pay the same amount throughout the span of the loan while adjustable-rates (like interest only, two-step, and balloon) will change depending on the terms you agreed on. Know how this could affect your monthly allotted budget and whether you can handle increases.
If you are already experiencing mortgage payment problems, immediate check on your loan documents to determine what your lenders can do for you. If you have trouble understanding these documents, you could contact a non-profit foreclosure prevention group called Homeownership Preservation Foundation.
Check your payment booklet or monthly billing statements that contain details on how to contact your lenders because they may already not be handling your loan.
Lenders usually have a loss mitigation specialist that present alternatives that can help you prevent foreclosure.
Then during the process, always document all communications and note the date, the representative you talked to, and a summary of the exchange.
If your lender can not help, go to the U.S. Department of Housing and Urban Development or Homeownership Preservation Foundation. These groups can help you seek a housing counselor who can represent you to your lender so they find solutions that can help you prevent foreclosure.
Find a licensed debt manager that can help you make provisions, educate you about finances, and assist you in programs that will hopefully control your debt position.