Financially strapped consumers are losing their homes to foreclosure as higher mortgage payments and other expenses are making it difficult for some to keep up with payments. Although foreclosures are on the rise, it isn’t a foregone conclusion that you must lose your home. In fact, if you take certain action you can avert losing your home despite your present difficulties.

How To Avoid Home Foreclosure

You only need to watch the news or read internet reports to learn that home foreclosures continue to be a problem in many markets. But, what you may not know is that losing your home to foreclosure doesn’t have to happen.

You can avert foreclosure by following these steps:

Communicate with your lender. Notifying your lender that you are having difficulty making payments is important. Some will work with you, some will not. Missed payments could be tacked on to the end of your mortgage, giving you a little bit of breathing room allowing you to get back on your feet.

Get out your mortgage agreement. Find out what your legal documentation says about your loan. Every state has specific rules and regulations regarding foreclosure; familiarize yourself with the laws in your jurisdiction by contacting your state’s housing department.

Seek counseling. A housing counselor can offer assistance, people who are usually available through your state’s housing department or county (or city) housing agency. A counselor can advise you on how to reorganize your finances or share other options to delay foreclosure including discussing your consumer rights.

Sell your home. If staying in your home doesn’t look like a possibility, then consider listing it for sale. Contact your mortgage lender to see how much time you have to sell your home before foreclosure. If you are working with a realtor and your home has a good chance of selling, your lender should be agreeable to this arrangement. You’ll still be responsible for back payments, interest charges, taxes and any deficiency from the sale of your home.

Assumption of the loan. Even if your mortgage agreement doesn’t permit the assumption of a loan, your lender could be agreeable to this method if a qualified buyer can take over payments. You may end up losing whatever equity you have in the home, but you’ll save yourself from having your credit trashed due to foreclosure.

In some cases you may be able to give your home back to the lender and have your debt forgiven. Provided that there are no other liens on the property, your lender may be agreeable to this method.

Some steps to avert foreclosure are more harmful to your credit than others, but if your options are limited then so will your choices be. Taking action sooner, rather than later can give you more latitude and give you a fighting chance to stay in your home.

Further Reading

In Boston, Residents Seek Face-to-Face Advice to Avoid Foreclosure

Mortgage Lending Guides

Should bankruptcy laws be tweaked to help homeowners avoid foreclosure?

Steps To Take When You Cannot Pay Your Mortgage

Understanding and Reporting Suspected Predatory Lending and Fraud

Tags: foreclosure, home mortgage, HUD, mortage lender, mortgage broker, mortgage fraud, second mortgages