If you are having trouble making your house payments these days, you are not
only. A recent report from RealtyTrac, Inc. says that foreclosure filings were up 48% from the prior year. The states that have been hit the hardest by foreclosures in 2008 include Nevada, California, Arizona, Michigan, Florida, and Colorado.
In addition to these concerns, a new study published by Harvard University says that the US housing market is the worst in 50 years. The study notes that the collapse of the mortgage market, the sharp rise in foreclosures, the decline in new home construction, falling home prices, and increasing job losses have all converged to make it harder for the economy to recover. current real estate climate in the coming days.
For homeowners who are about to default on a mortgage obligation, the sooner steps are taken to protect a home, the better. The following steps can be helpful in avoiding foreclosure:
1) Review the terms of your mortgage or deed of trust. Review the sections related to noncompliance and seek the advice of an attorney. There are several attorneys who specialize in real estate law who know the foreclosure process in each state and are best qualified to advise you of your rights. Some may offer free initial consultations. Additional assistance can also be obtained through non-profit legal aid organizations and / or low-cost legal services. Check with your state bar association to see what services are available.
2) As soon as you realize that you are unable to make a payment, contact your lender directly and discuss and evaluate all options with them. It may be possible to refinance or change the terms of your payment schedule. Check to see if your lender offers deals and if you qualify for a forbearance agreement. This would allow you to temporarily postpone payments for a certain period of time without your lender filing a notice of default and initiating a foreclosure proceeding against you. If your situation is dire and you find that you will not be able to make payments for an extended period, see if your lender will accept a deed in lieu of foreclosure. Through this process, you will basically transfer your home to your bank or lien holder and can avoid a lengthy foreclosure process.
3) Talk to counselors from national programs like HOPE NOW. It is an alliance between lenders, credit and mortgage advisers, and investors. HOPE NOW can help distressed homeowners by providing simplified measures and options to avoid foreclosure.
4) Proceed to sell your home. You can use the services of a real estate professional in your local area or list your property online through any number of websites for sale by the owner. Even if you don’t get the asking price, your lender may agree to a short sale. This means that you sell your property for less than the outstanding balance owed, but your bank or lender agrees to accept the proceeds as full satisfaction of the debt. Not all lenders will accept a short sale, and most have certain procedures that must be followed.
5) As a last resort: file for bankruptcy. Once you file a bankruptcy petition, the foreclosure process will automatically stop. Depending on the type of bankruptcy you file, you may be able to work out a payment plan to keep your home. However, understand that once you file for bankruptcy, it can show up on your credit report for seven to ten years.