Millions of homeowners are struggling right now to make their mortgage payments. However, many end up making one or more of the following mistakes. The end result is that they lose their homes to foreclosure. Most foreclosures can be prevented if you start early and stay clear of the common mistakes discussed below. For detailed information, follow the links to access the relevant topics pertaining to them. Lenders have too many foreclosed homes on their books right now and are not interested in being in the real estate business. So here are some mistakes that you want to avoid making when faced with the prospect of losing your home to a foreclosure proceeding:
Mistake #1 – Doing nothing.
This is perhaps the worst mistake that a homeowner facing foreclosure can do. They feel helpless, overwhelmed and just do nothing. If you fall behind on your mortgage payments, call you lender and find out your options. Or contact a mortgage modification company or your mortgage broker and consult with them as to what you can do to avoid foreclosure of your home.
Mistake #2 – Avoiding communicating with your lender.
Call and write to your lender and discuss your situation. Find out if you qualify for a mortgage modification plan or whether you qualify to refinance your home. The longer your wait to initiate communication with your lender, the harder it becomes to take advantage of any available foreclosure alternatives.
Mistake #3 – Waiting too long.
If you are more than 3 months behind in your mortgage payments, your lender could start foreclosure proceedings against you. There is still time to save your home by contacting your lender, a mortgage modification company, your attorney or financial adviser. You have other options. Short sale, selling your house if you have equity, deed in lieu of foreclosure, mortgage modification, and last resort bankruptcy filing.
Mistake #4 – Moving out of your home.
If you do get a notice of default or some other legal document stating your lender has started foreclosure proceedings against you, do not move out of your home. A mortgage modification company or an attorney can help you negotiate with your lender options for saving your home, giving you more time to stay in our home and sometimes without having to make any mortgage payments while you are negotiating with your lender.
Mistake #5 – Falling victim to fraudsters.
You will more than likely run into unscrupulous criminals who promise to you save your home. Beware of anyone who asks for money upfront and claims to be an expert in handling mortgage modifications or other negotiations to save your home. There are numerous legitimate mortgage modification companies and housing counselors helping homeowners so always check references and credentials before you pay any one to help you save your home from foreclosure. The only person who is legally allowed to charge an upfront fee is an attorney who may charge a retainer for their services.
Mistake #6 – Not seeking professional help.
Many homeowners are too embarrassed to seek professional help, and as a result they lose their home to foreclosure because they are not properly advised on their options.
Mistake #7 – Being in denial.
Many borrowers are behind on payments and yet believe foolhardily that their lender will not foreclose. Lenders are in the business of making money, and if you do not pay your mortgage, they will institute foreclosure proceedings and foreclosure on your home. However, lenders would much rather work with their borrowers and avoid foreclosure. An average foreclosure costs the lender around $50,000.
Mistake #8 – Shielding other assets.
No using other assets to save their home. If you have assets, then you may want to consider selling them to pay your mortgage balance current. This may not always be an option if you have an underwater mortgage that may be eligible for any of the numerous loan modification programs.
Mistake #9 – Not being educated and informed about the foreclosure process and foreclosure laws.
There is a lot of free information available to homeowners on the Internet that they can take advantage of to educate themselves on their rights and remedies with regard to their state’s foreclosure laws.
Mistake #10 – Not hiring a foreclosure defense attorney.
You have rights and remedies to defend yourself in a foreclosure proceeding. A real estate foreclose defense attorney can help defend you and save your home. Seek legal help immediately.
Many times the lender has incorrectly filed foreclosure proceedings, and your attorney will be able to recognize whether they have properly filed the action or not. Also, you may have been a victim of predatory loan practices and be able to rescind your loan. Your attorney will conduct a forensic loan audit to make sure that your lender complied with all Truth and Lending and RESPA disclosure laws. If there is a violation, your attorney can use this as leverage with your lender to get a favorable result for you and save your home from foreclosure.