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A foreclosure notice doesn’t mean you have to lose your home

On Behalf of | May 6, 2021 | Uncategorized

As soon as you miss one payment on your mortgage, the clock starts ticking. Your lender likely has strict policies about addressing missed payments. Although they may offer a grace period of a week or two, they will likely start sending you notices or calling you after a payment is two weeks late or more.

When you’ve gone a whole month without making a payment, they may initiate foreclosure proceedings. Other times, they may give you slightly longer to make your missed payments. Either way, if you fall behind and don’t quickly catch up, your lender could try to take your home from you.

Foreclosure can take some time, which gives you an opportunity to push back. It may be possible for you to defend yourself and your home against foreclosure, but you will need to start preparing sooner rather than later. What are some of the ways to prevent foreclosure?

Liquidate assets to catch up on your mortgage

Before things get too far out of hand, you may have the opportunity to protect your property by making all the missed payments in full. You may need to sell other property or even borrow money from family to make this happen, but it can be a good solution if your financial issues were caused by a short-term cash flow problem.

Renegotiate or restructure your mortgage

Your economic circumstances may have changed since you first bought your home or security or current mortgage. If your income or property value has changed, that could be a very good reason to ask your lender to change some of the terms in your mortgage.

Increasing how long you have to repay the loan, reducing your monthly payments or even eliminating a balloon payment are all ways to help you regain control over your mortgage.

Find a way to refinance

If you have fallen behind on mortgage payments, your credit score may have taken a hit. Still, there are certainly lenders out there who will refinance your property when you fall behind on payments. Some of these lenders offer sub-optimal terms, so which means homeowners need to be careful about what terms they stopped if refinancing is the approach they take.

Explore bankruptcy options

Bankruptcy affects your credit score and can limit your other financial opportunities. However, it can also immediately halt foreclosure proceedings and help motivate your lender to work with you regarding the terms of your loan.

Receiving a foreclosure notice in the mail does not necessarily mean you will lose your home. You have the right to defend your home from foreclosure, and there could be several different ways for you to push back against attempts by your lender to claim your home as collateral for the loan on which you’ve missed a few payments.