It does not get much worse than foreclosure. Think of it as the worst case scenario that both you and your lender want to avoid. Nobody wins in a foreclosure situation. The mortgage company has no choice once a borrower gets so far behind in their payments and is forced to initiate the legal process to evict the owner.
The first rule to remember when times get tough and your mortgage payments fall behind, make sure you communicate with the lender. The worst thing you can do is to not call or avoid the lender’s calls. The mortgage company is going to make every effort to help you avoid foreclosure. As soon as you realize there is trouble, be pro-active.
Freddie Mac has a very detailed explanation of the foreclosure process and the steps you can take to avoid it. There is also a good discussion about the different options you can look at when it is clear that foreclosure it coming. Understand the process and what your rights are. Be very careful about trying to borrow your way out of a bad situation. Beware of predatory lenders which can take a bad situation and make it much worse.
Do not be afraid to contact a bankruptcy attorney and find out what protection is available to you under the bankruptcy code. The Department of Housing and Urban Development has even more information on how to deal with the foreclosure process. Foreclosure rates are rising across the country. Make sure you are in constant communication with your mortgage company and you will find out how much they too, want to avoid foreclosure.
Tags: credit, Responsible Lending
