The process to put your home into foreclosure can begin almost immediately after a missed mortgage payment. Approximately 15 days after your payment is missed you can expect a late notice warning. Within 15 more days (30 days after failing to pay a house payment) you will likely receive a notice letting you know of an intent to start foreclosure if payment is not immediately paid in full or other arrangements are not made.
That leads us to the tips that should help answer the question “How can I save my home from foreclosure?”. Continue reading to find steps you can take to save your house.
Before you continue on it is important to keep in mind that when you made a deal with the lending company you signed yourself into a partnership of sorts. To maintain this partnership and help ensure the other half is willing to take an additional chance on you or give you every option available to stay in your home - it is up to you to do your part. Having said that...
Rather than ignoring the phone and leaving your mail unopened your first step should be to keep the lines of communication between you and the lender open. The mortgage lender is less likely to want to work with you and really unable to make arrangements with you if that communication is not there. So don’t ignore that call and if you do - be the one who initiates the next contact. Get your game plan together, which should include: why your payment is late as well as what you can afford financially to catch up.
Your next step to consider is sending the mortgage lender a hardship letter. This is a letter that explains to them the circumstances that are making it difficult for you to pay your mortgage on time and offer up information as to whether or not you feel you will be able to catch up in a reasonable way and time frame.
There is no guarantee that a hardship letter will make much of a difference but when it comes to your home it is a step that is far to easy to not give a try. A quick search on Google or a call to the bank can help you to understand how to procede with this step.
Another option, which will likely only become available if you maintain and open line of communication with your mortgage company, is forbearance. Forbearance can come into play if there is good reason to believe that your circumstances of hardship are temporary and that you can and will be able to get back on schedule with your house payments. This agreement can be executed in a number or combination of ways which include the lending company taking your past due payments and adding those to the term of your mortgage (30 year mortgage may be negotiated to a 35 year loan) in order to keep your home from foreclosure or they may allow you a period of time in which only a partial payment is required monthly in order to allow you time to get things in order and become financially capable of making regular full payments.
With forebearance, as one would expect the bank or lender would require proof of circumstances . So let's say you are behind because of the loss of a job or a serious medical condition - the bank would need to be provided with proof that this is a legitimate situation.
Another option that might help you to save your home from foreclosure is working with your mortgage lender to re-negotiate the type of mortgage you signed up for. In many cases the type of loan - namely those who opt for an adjustable rate mortgage - is where people start finding themselves in trouble and experience difficulty with making payments regularly or on time. Talking with a lender representative about switching over to a fixed rate mortgage may be the change needed to make things more manageable.
Don’t want your home to go into foreclosure but realize it is no longer the right place for you and/or the family? Depending on the circumstances that you find yourself in there is always the option to sell the home to get out from underneath it. If you find you owe more for the home than it’s current market value then your bank (lender) may be willing to negotiate a short sale - which basically means they may agree to accept less for the house than what is currently owed on it.
If all else fails and you really want to save your home from foreclosure you may have the option of negotiating a deed in lieu. This should be used as a final option to keep a foreclosure off your credit report (possibly) and when all other options have been exhausted. A deed in lieu boils down to you being willing to give the lending bank the deed to the home and simply walking away from it.
With this type of agreement things need to be discussed in detail and the circumstances of the hardship which makes meeting payments or staying in the home an unmanageable option need to be accepted and understood by the lender. If the details of the agreement leading up to the deed in lieu are not carefully gone over and understood the homeowner risks owing the lender even after relinquishing and walking away from the home.
At the end of the day your honest communication with the lender, when done in a timely manner is what will open the door to the options to save your home from foreclosure making your willingness and ability to communicate the number one contributing factor (in many situations) on whether you lose your home or save it from going into foreclosure.