How To Avoid Foreclosure

By the time people get into the situation where they are wondering how to avoid foreclosure, there is a kind of panic mode settling in around them. It is useless to say at this time that the best way to avoid foreclosure is to take steps earlier before the situation gets this bad. That’s almost an insult to the person who is wondering how to avoid foreclosure right now. Talking about what should have been done last year or even six months ago is really useless.

Avoiding foreclosure comes in two flavors. One is that you find a way to lower the payment pressure. The other is that you find a way to sell the house and pay out the mortgage.

They don't want your house!

Having seen people face the trauma of foreclosure and having learned from their experiences, I can safely say that the number one thing that you can do and do now to avoid foreclosure is to get in touch with the lender and ask to speak to someone in the loss mitigation department and ask for a “needs” interview. It may be a really difficult call to make because right now, your feelings for the lender are somewhere between dread and panic.

But think about their side of the issue. They don't want your house. All they really want is their money. They don’t have something personal against you, as a person. Also, they have seen this situation time and time again. You are not the first person to face foreclosure.

Be Prepared

It depends on your lender what they call their loss mitigation department but if you call and explain that you want an interview with whoever is in charge of loss mitigation, they will be able to tell you exactly who handles that aspect of the business and make the arrangement for you to talk to this person. Ideally, you will have some time to get ready for your interview.

But you can make plans before you call. Here is the (short) list of things you need to know before you meet the loss mitigation person:

What can you afford?
Do you want to keep the house?

The answers to these questions have a calming effect in this time of fear and pressure. The real question is how to avoid foreclosure. If your answer to the first question is that you can afford lower mortgage payments, then your second question becomes easier to answer. If you cannot afford lower mortgage payments – say for instance, you have lost your job and have gone through your savings and there is no income – then your answer to the second question is clear. You probably can’t keep the house. Be realistic and focus on selling it. Talk to the loss mitigation person and explain the situation and see how they can help you. Depending on your choice of actions, they have undoubtedly had experience facilitating either choice.

Reverse The Power-Play With Your Lender

Before you make that call to your lender, make sure you've read the Foreclosure Emergency Kit. Not only will it help you to have a better understanding of your situation, it will also give you the power to reverse the power-play with your lender. Claim your FREE copy here.