The Knock on the Door
Foreclosure is a scary word. However, even if it's staring you in the face, know that you may have options.
You know it’s coming – that knock on the door. That heart-wrenching, gut-tearing, echoing knock from the deliverer of bad news; that piece of paper with the nasty word “Foreclosure” on it. You have done everything in your power to avoid this, including taking out emergency cash loans, but it seems that no matter what you tried, you just could not stop foreclosure from happening. How can you save your credit when you are facing foreclosure?
Don’t Panic!
It may be a difficult thing to remember, but the first thing to remember once you get a foreclosure notice is to not panic or give up. Considering how many foreclosures that have happened since 2007, it may not be too late to save your credit or your house. Before you do anything, research all your options – including those from the federal government.
You also do not want to bury your head in the sand and hope your problem will go away. As much as you want to wave a magic wand and wish it away, you can’t. Contrary to popular belief, lenders do want to work with their borrowers to create a workable solution for all involved. So, how can you save your house and/or your credit when hit with a foreclosure notice?
Research Your Options
Go to your favorite search engine and type in the phrase “foreclosure options,” and you will get over one million results. So that tells you that there are many people in a similar situation as you are, as it is a very popular topic right now. Unfortunately, only a third of those results will give you real solutions that you can use. Of those usable results, there are several ideas listed online that may help you save your credit as well as your house.
Ask for a Forbearance Agreement
Explain your situation as professionally and patiently as possible, and ask for a forbearance agreement. A forbearance agreement will allow you to make reduced payments for a pre-determined amount of time. The written plan will specify all the details. If your lender agrees to this, then you must make the payments on time, or they will begin the foreclosure process all over, and no amount of emergency cash loans will help you get back on track.
Add Back Payments to Mortgage
If your lender does not want to give you a forbearance agreement, see if they would be willing to restructure the loan and add the missed payments on the end of the loan. Even though this will mean more time at the end, at least you can save your credit and your house, meaning that your loan will be in good standing once again.
Short Sale
Then again, if you are just ready to get out from under the strain of your mortgage, it might be a good idea to just sell your house. You can ask your lender to give you some time to sell the house, and they may approve a short sale — i.e. selling the house for less money than owed to the lender. When the house sells, the proceeds will then go to the lender to help pay off some of the debt.
The Final Word
No matter the method you choose, you must be willing to take action with something. Letting the foreclosure go through without working with your lender will result in your credit being destroyed and your house being taken. Even if you do not want to live there anymore or pay on the mortgage, you still need to make sure your credit stays healthy for your future financial health. Otherwise, no amount of emergency cash loans will help you get ahead. Get going and take action now!
(Photo Credit: http://www.flickr.com/photos/sercasey/ / CC BY 2.0)
