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Home › Articles › Home Matters › Foreclosures

Foreclosures

What to Do If It Happens to You

By Shel Franco

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, LLC in San Mateo, Calif., a company that provides comprehensive consumer debt resolution services, offers two action steps you should initially take:

  • Contact a reputable foreclosure assistance organization. If you have already fallen behind on your mortgage payments and are facing foreclosure actions from your lender, it would be wise to contact a foreclosure counseling organization right away. Depending on the state in which you live, foreclosure proceedings can move quickly. The earlier you start negotiating with your lender, the better chance of finding a solution to save your home. Make sure any organization you do business with has a strong Better Business Bureau (BBB) rating before entering into any agreement with them. The options available to you are similar to the following: forbearance, loan modification, deed in lieu of home sale. At this stage of the foreclosure process, refinancing will probably not be an option because of the delinquencies on your payments.
  • Watch out for equity skimmers. If your house is facing foreclosure, you will probably receive solicitations from several people who are looking to "help" you prevent foreclosure by offering to sell your home for you, or by taking ownership of your home. In most cases, these solicitations are scams trying to take advantage of people in difficult situations. The perpetrators are trying to take the equity you have built up in your home right out from under you.

Also important to keep in mind, Housser says, is "when a mortgage goes into default, lenders will not accept partial payments." For instance, if you are three months behind on payments and send in a check for $300 but you actually owe $4,200, the lender will usually send the check back. "This scares a lot of clients," he says. "It doesn't mean you've already lost your home; it means you need to negotiate something with them." If you are in some kind of temporary situation, then there are ways of working with your lender, he says. "However, if it is going to be a permanent budget shortfall that is never going to be cured, then that is a problem and you probably will not be able to stay in the home."

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