Facing Foreclosure? - Do Something About It!

Probably never before in the recorded history of real estate transactions has foreclosures received such prominent attention. It is as equally likely that there have never been such a high percentage of foreclosures in relationship to all other real estate transactions. In fact, the possibility of foreclosure has most likely never crossed a great majority of borrower's minds prior to this past year.
Attempting to pinpoint exactly what went wrong and how we found ourselves at this point could cause too much fruitless debate, so I am going to make the assumptions that lender greed, borrower and broker ignorance, couple with a stagnant national economy have driven the spike in foreclosures. You may disagree with me as is your right, but each of the above assumptions plays a role in our current market troubles.
I want to bring attention to one facet of this situation and focus on how relief is possible for certain borrowers. When the reality of foreclosure arrives at the borrower's door, usually in the form of a serious letter from the lender or worse, the Sheriff, most people's natural reaction is denial. Certainly they are aware that the bills have not been paid (unless a trusted family member or friend has failed to perform their entrusted duty of making payments), and the notice should not come as a surprise.
Unfortunately, it is this denial, and therefore rejection of reality, that paralyzes people from acting and working to resolve the situation. If there was ever a time that you need clarity of thought and the ability to problem-solve, it is now! Even if this situation was not a surprise to you, it is time to accept the reality and begin to enact positive changes.
First, gather your resources and locate suitable help. Most likely, the lender has sent you numerous letters that specify several possible solutions that will prevent foreclosure. Find those letters, or if you tossed them in the garbage, call your lender immediately and request copies. With those letters in your hands, you will have taken an important first step towards preventing foreclosure.
Since I mentioned calling your lender, I want to let you know that from your lender's perspective the best thing you can do (besides paying your debt), is to establish and maintain communication with them throughout this process. You may feel like you are being taken advantage of by your lender, you may be embarrassed or afraid to call, or you may need to find a trusted third party to help you make the call, but do it, and do it now! Lenders tend to be more lenient and work with those who show a genuine interest in resolving the situation by maintaining communication.
It is important that you keep in mind that your lender is going to go to every legal length possible to recover their debt, so be careful what you say and reveal in discussions with their representatives. Unless you are a lawyer, or have professional experience with collections, your contact with your lender should remain focused on getting them to send you all of the information they have that could help you prevent the foreclosure. Specifically, you will want to request a hardship package. This information will be required by the lender for certain types of relief, so get it and be prepared to complete the paperwork.
Probably one of the smartest things you can do will be to associate yourself with professional help. Call your local mortgage broker who originally sold you the loan product and see if they are aware of alternative solutions, like refinancing or forbearance, that can help you prevent foreclosure. If you are in such a financial position that keeping the house in unfeasible, consider putting your home up for sale. Make sure you find a Realtor with experience in pre-foreclosure sales, or short sales, to help you choose the best course of action.
Most importantly, you need to do something! You must recognize that this is a very serious situation with long-term financial consequences that is preventable! The longer you wait, the more you deny the reality of the situation, it gets much worse. If you cannot bring yourself to attempt to resolve the problem alone, reach out to friends and family for help and guidance. Locate suitable professional help, whether it is a lawyer, Realtor, or mortgage lender, and accept their guidance.
In many, many situations, foreclosure was easily preventable by the actions of the homeowner/borrower. It is the lack of action that guarantees the foreclosure will take place. If you would like to try and keep your home, or even if you know you must give it up, take the time and make the effort to prevent foreclosure as the solution. The financial stakes are just too high to approach it any other way.
Joe Hayden is a real estate Realtor based in Louisville, KY. He loves helping people achieve their dreams and goals, and especially loves tackling the complexity of real estate transactions. He can be contacted through his website, Louisville, Kentucky Real Estate. Please visit his real estate blog here.
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