What To Do If Your Home Is Approaching Foreclosure
Once you start missing your mortgage payments, your lender reserves the right to foreclose on your home. Though your loan is technically in default after missing a single payment, most lenders don't start foreclosure proceedings until your loan is 90 days overdue.
The entire foreclosure process takes a lengthy amount of time to complete; in some states, it might be years before your home is officially foreclosed on. However, don't let yourself be lulled into inaction by thinking you have plenty of time to save your home or find alternative living arrangements.
If your home is approaching foreclosure, it's better to act sooner rather than later. Here are a couple things to do if you've missed multiple mortgage payments and your home is nearing foreclosure.
Call Your Lender
As soon as you miss your mortgage payment, contact your lender. It's a costly mistake to avoid your lender's phone calls and letters regarding your missed payment. Unfortunately, many homeowners are embarrassed about missing their missed payments or don't know what to do to fix the situation.
Foreclosure is an expensive, time-consuming process for your mortgage lender, and if possible, it would like to avoid it entirely. Contact your lender to explore your options.
You may qualify for a temporary payment reduction, a mortgage modification, or receive permission to temporarily cease your payments. Working with your lender can also help minimize the fees associated with your missed payments, reducing the amount of money it takes to get caught up on your mortgage.
Decide If You Want to Keep Your Home
It's essential to decide if you want to keep your home. If the home is too costly or doesn't suit your family's needs, you should consider selling the property.
It's possible to sell your home even if you own more than the home is worth by asking the lender to permit a short sale or by accepting a deed in lieu of foreclosure. You may decide that you want to keep your home, but financial hardship has made the payment too expensive. It's time to take steps to adjust the payment so that it better fits your budget.
If you have a lot of debt, you might want to explore a debt consolidation program or bankruptcy. Both of these options can reduce or eliminate your debt load so that your mortgage payment is more affordable.
Should you opt for chapter 13 bankruptcy, you can even include your missed mortgage payments in your monthly chapter 13 payment. An attorney who specializes in foreclosure services can help you explore the options that best fit your situation.