Avoiding FORECLOSURE!!

Research released by Realty track shows that there are 70% more foreclosures since last year.

Generally it takes a few months before this happens but there are events that happen that lead up to this ugly ending.

If you are a homeowner that has been late a few times with your mortgage, don’t worry; you will not loose your home that easily. Typically if you are late with a few payments, the lender will contact you and generally if you missed 3 or more payments, your lender will begin to move towards foreclosure. Once the process starts, the time it takes for you to be out on the street depends on each state, which could be from 3 to 10 months. The FHA loans require at least a 6-month period said Brian Montgomery, Assistant Secretary of Housing at the Department of Home and Urban Development (HUD).

To prevent foreclosure on your home, there are many things you can do. First, DO NOT buy-into a dangerous loan that you cannot afford. If you are falling behind on your mortgage payments and the lender contacts you, the worst thing you can do is ignore their phone calls. Take action by contacting them and letting them know your situation. If you have fallen ill or had a temporary loss of income, you will be amazed how many lenders want to work with you to keep you in that house because foreclosures are very expensive for lenders.

Depending on the lenders, they will either want to restructure the loan or stretch the loan to help you get out of trouble. Lenders would much rather receive their money for the loan then have to go through the process of foreclosure.

And finally if you are in a situation where you can refinance, do it now but don’t make the same mistake twice and get a loan that really fits your financial situation.

UPDATE Sept 17th 2007: Before making an important decision as a short sale or foreclosure you must read these other articles from the “Homeowner’s guide to preventing foreclosure”