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Foreclosures
What to Do If It Happens to You
By Shel Franco
Foreclosure is one of those "it'll never happen to me" phrases, but poor financial planning and living beyond your means, as more and more couples are doing, can lead to foreclosure before you know it.
For most, your home is your single largest investment. It's where your children are learning to walk, where you carry on your family's holiday traditions and a place where you've invested a hefty amount of money.
Fortunately for homeowners and buyers, interest rates have remained at an all-time low and refinancing has offered new beginnings for those whose mortgage payments were becoming almost too much to handle. However, despite a favorable interest environment, there are still those who find themselves in an unavoidable foreclosure situation.
"There is a stigma placed on foreclosures," says Sandy Cutts, spokesperson for Fannie Mae, a government agency that works to make homeownership attainable. "It is not in the best interest [of the lender] to swoop down like a vulture and repossess the property. It costs a lot of money to cultivate a borrower, and the lender will [usually do everything to] help the [homeowner] work it out if possible."
There are steps you can take and solutions available. "I always advise people that at the first sign of financial trouble, contact your [bank]," she says. "Be forthright and honest."
If you find yourself in a difficult financial situation and realize you can no longer afford your home, there are options available. If the thought of foreclosure has crossed your mind, read on. We've spoken to several industry experts on the dos and don'ts of home ownership, financial readiness and how to deal with the emotional stress your entire family faces when losing your home becomes a reality.
If foreclosure actions have already begun and there is no hope of keeping your home, Andrew Housser, co-CEO of Freedom Financial Network