The realities of facing a foreclosure can be very painful to grasp. A foreclosure not only means the loss of a home but realistically a huge gouge to your credit and a mountain of debt. There is always hope and a road to recovery, but if you are able to catch the foreclosure before there it is finalized you may be able to save yourself a lot of money and hundreds of points to your credit score.
If you find yourself 60 days late on your mortgage you’re not alone. As of December 2011, 2.6 million Americans are in your same boat. It has been a few years since the landslide of foreclosures began cascading over the United States. Thankfully lenders and private companies have come to realize the overall benefit of the economy for millions of homeowners to remain in their homes. Of course, they haven’t made it easy. If you dedicate some time to exhausting all of your options to avoid foreclosure you may just beat that notice of trustee sale.
When you know that you’re not able to make a mortgage payment it is important to notify your lender rather than ignoring and pretending like everything is fine; they’ll notice trust me. You may be able to work out a repayment plan that will allow you to catch up without snowballing your past due payments. There is an option to request a loan modification or even a short sale to avoid foreclosure. There are a few different routes available to you so being prepared ahead of time will make the whole process no matter which one you take, a whole lot less painful.
First and absolutely FIRST, it is important to take a realistic evaluation of your financial situation. Financial planners ask their clients to compile an exhaustive list of every single expense due each month, then tack on and take a serious look at where you’re spending rest of your money over the past two years. If you have online banking or have access to your credit cards online you likely have an option to run a report demonstrating in a glaringly transparent representation of how much you’re really spending on groceries, gas, and say, entertainment.
Next, gather all of your household proof of income statements: paystubs, tax returns, w-2’s, bank statements, mortgage statements, and proof of any other income (alimony, child support) for at least the past two years. If you’ve had a loss of job, gap in employment, a divorce, or other such big life events, and gather all documentation describing what happened.
Credit counselors and HUD certified foreclosure prevention specialists are a great resource to help strategically plan your best route to avoid a foreclosure. If you have a particularly complicated situation you may want to seek the advice of an attorney specializing in real estate issues. This extra effort may just be the answer to avoiding late charges, foreclosure debt, possible bankruptcy and a decimated credit score.