The Foreclosure Process; Can it be Stopped?

The foreclosure process is still steamrolling through America. While President Obama has promised to put the second half of TARP funds to better use than the first half, it still may take a while before the real estate industry and homeowners see any relief from what has become a long, arduous journey. Until things begin to improve, here are a few things you need to know, to stall or prevent going into foreclosure.

Mortgage lenders naturally want to recover as much money as they can from the loans they provided homeowners. While a foreclosure isn’t ideal and won’t get them even half the money they originally put out, something is better than nothing…at least that’s the way they look at it. So in order to save your home from the foreclosure process, you have to show them the money. But before you do that, keep in mind what Mike Himes, a housing counselor for the nonprofit group NeighborWorks Homeownership Center in California has to say; “troubled homeowners need to be realistic about their ability to pay. He says that there have been many borrowers who have swiped their cards for $20,000 on their credit cards only to be forced out of their homes later on.” Trying to appease the mortgage lenders this way can end up costing you more than you can ever repay, in the end.

If you don’t have the money to give to your mortgage lender to save your home from foreclosure, the best move is for you to call them weeks before your next amortization is due. The reason for this is that you will be considered delinquent the day after the due date if it is not paid, so you want to take control of the situation before you become part of the nasty real estate statistics that are out there right now. That being said, homeowners usually have grace periods of up to 15 days to pay what’s due.

When the call comes from your mortgage lender regarding delinquency depends on your payment history with them. I know as a homeowner that this is not the call any of us wants to get, especially when it comes to something as sacred as our personal real estate. But, if they do, here’s what you can expect according to Wells Fargo Home Mortgage executive Joe Ohayon, “if you frequently pay in the middle of the grace period, you will not be called before that point. If you have been a good payor, the calls will just be reminders and not direct collection calls.” So there does appear to be some consideration for the type of customer you have been.

If the worst does happen, and a homeowner receives a notice of default of foreclosure, they still have 90 days to negotiate with the lender to save their real estate. For example; you could still negotiate a loan modification, a short sale or a temporary moratorium. While these are some of the things you can expect when your home is under threat of foreclosure, every situation is different and every mortgage lender is different. Ultimately, until we begin to see some results from the second half of the TARP money, homeowners are going to continue to lose their homes, and banks are going to continue to lose money, which is the vicious cycle that got us into this mess in the first place. What about all of you, what have you done or heard of other people doing to save themselves from foreclosure? Is there any real help out there, or is it just a bunch of smoke and mirrors? Please share your experiences with the rest of us and post any comments, questions or suggestions you may have.

If you are in jeopardy of losing your home, visit www.hud.gov for guidance on what you can do. 

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