Avoiding Home Foreclosure

There are many reasons homeowners may face foreclosure on their homes. Among some of the more common reasons are job loss, health issues, divorce and death. In each of these cases, the homeowner is unable to make his or her monthly mortgage payments, which ultimately can lead to foreclosure.

Here is some advice for homeowners who find themselves facing possible foreclosure.

1. Avoid foreclosure prevention companies that charge fees to help.   You don’t need to pay hefty fees for a service you can get for free from governmental organizations such as the HUD Office of Housing Counseling. In the past many foreclosure prevention companies turned out to be scams, taking your money and not delivering on their promises.
2. Don’t avoid the problem. Waiting only makes the problem more difficult to deal with. Contact your lender right away and explain the situation. See if the lender can help you in any way.
3. Review your mortgage documents and understand your rights and those of the lender. You also should research your state specific foreclosure laws and understand how they apply to your situation. Lastly, go online, meet up with an attorney or contact a HUD-approved housing counselor to find out what your options are in trying to stop a foreclosure. HUD-approved housing counselors are funded by HUD and are free of charge or cost very little.
4. Review your living expenses to find ways of cutting back on unnecessary expenditures. Expenses such as memberships in clubs, eating out, entertainment, insurances, cell phone plans, etc. should all be reviewed, with the intent of cutting out or trimming back to a bare minimum. Consider selling some of your assets such as stock and bonds, a second car, jewelry and any other such items. Can other members of your family help with the cash flow on a temporary basis?
5. Find out about state and federal government assistance programs that could help you.

Making Home Affordable Program was introduced by the Obama Administration to help homeowners avoid foreclosure. The program is designed to help homeowners by lowering monthly mortgage payments or providing a way to walk away from a home without facing foreclosure. It also offers other forms of assistance for the unemployed and the underwater homeowners. You can get the program details at MakingHomeAffordable.gov.

Many state sponsored foreclosure assistance programs are also available and they can easily be found by searching for them online.