Jeffrey Harrington's Blog
It takes as little as two to three missed mortgage payments to receive a foreclosure notice from your lender. Receiving a foreclosure letter from your bank can be as unnerving as receiving a letter from the IRS. What you may not know is that there are generally two stages to the foreclosure process.
Take action on a house foreclosure notice
At first, you will likely receive a notice or letter that you have defaulted on your loan. The type of letter that you receive depends on the housing laws in the state that the house is located in. Additionally, depending on the details in your mortgage, you may need to go to court to start and finalize a foreclosure.
Details included on a loan default notice may include your full name, street address and the lender's name and address. The reason why you are receiving the notice is also included. There's a likelihood that you will also receive a date by which, if you get caught up in your mortgage payments, you can remain in your house.
Which raises the first step that you could take to keep your house out of foreclosure. As soon as you receive a notice of mortgage default, contact your mortgage lender. Work out a date by which you can get caught up in your loan payments. Go with a date that you know you can meet. If you get caught up in mortgage payments by an agreed date, you can avoid receiving a foreclosure notice of sale.
More ways to keep your house out of foreclosure
Additional actions that you could take to keep your house out of foreclosure will impact your financial health over several years. However, there is another step that could keep you from dealing with a damaged credit rating. But, let's start with the early steps.
Schedule a meeting with your bank and discuss a loan modification. Again, make sure that you can meet the adjusted monthly mortgage payments. It does you no good to work out a temporary plan that you will only default on within a few months.
Take out aloan with another lender to cover the cost of the late payments. Only take out enough to cover the amount of mortgage that you are behind on. This should bean absolute last option, as it will cause you to take on more debt.
Another late option is to file bankruptcy. You will likely need to come up with bankruptcy filing fee. It is possible to find attorneys who will cover their fees until after the bankruptcy goes through. Just know that a bankruptcy will affect your credit for seven years.
You could also ask relatives to give you enough money to get caught up in your mortgage payments. Do this early, long before the bank moves your foreclosure to the sale stage. To avoid having your house go through foreclosure, take on a second job. For example, you could take on contractor work on weekends or in the evenings at home.
Depending on the amount of equity that you have in your home, you could sell items at your house to raise enough to cover late mortgage payments. As worried as you might become after you receive a foreclosure notice, you do have options. Start brainstorming for ways that you could rectify the situation. Above all, take action and reach out to your lender.