What Not To Do During The Foreclosure of Your Home
If you fall short in paying your monthly mortgage payments, the likelihood of your home getting foreclosed is higher. Remember that foreclosure is considered as a legal process of repossessing your home by the lender. In other words, you’ll most likely be forced to move out when this happens. In turn, you’d not only lose your home, but you’d also owe your lender an extra amount of debt which can seriously affect your financial health in the long run. Here’s what you should avoid doing during the foreclosure of your home.
Reasons for Foreclosure
Experiencing home foreclosure can be quite depressing at times. Aside from the deliberate intention of never making any single payment, the possibility of foreclosure can also be because of various factors.
Here are some reasons for home foreclosure:
- You lost your job unexpectedly.
- You had an unexpected illness.
- Someone died in the family.
- You had a divorce or loss of second income.
- You had exorbitant debt obligations.
- You had been demoted with your job.
- You were unable to pay an interest rate that continues to increase.
- You had an unexpected significant home improvement cost.
While your circumstances may be different from others, the fact remains that you’ll be possibly be facing the risk of losing your home until you’ve settled your account. If you don’t want the foreclosure to haunt your future, it’s best to be mindful of your financial plans and decisions.
Things NOT to do during the foreclosure of your home
Remember that foreclosure can result in the loss of your house, additional foreclosure fees, extra legal fees, and a decline in your credit rating. Once your lender repossesses your home, you’ll probably find it more difficult to take your house back, which is why understanding foreclosure can help you improve your situation. Here’s what not to do during foreclosure:
Don’t ignore the problem.
The moment you realize the problem, it’s essential that you take action immediately. Keep in mind that the more you ignore the issue, the more likely that you’ll be asked to move out of your house.
Don’t forget to communicate with your lender as soon as you recognize the problem.
Try to make things work with your lender. Contact them as soon as you realize the problem and try to explain your situation. Let the lender know of your financial difficulties and work things out together for possible solutions before you’ll lose your home.
Don’t forget to seek counseling.
Seeking counseling is essential when you’re facing a foreclosure process. It can help you understand how you can keep fighting for your home. However, you should only be asking for counseling service from the list of your state’s approved housing counselors.
Don’t disregard court requests or documents.
While it’s understandably difficult to handle foreclosure matters, you should still be careful of your actions. Acknowledge any documents or requests coming from the court because your failure to do so may result in excessive fees and even legal concerns.
Don’t sign the title of the property in the name of another company.
Be watchful of those companies who will try to lure you in by promising to get the mortgage for you and re-sign it back over to you. Although rare, take note because this does happen. The truth is they will let the foreclosure proceedings continue, and later on dump your home. But what’s worst of all is that you can’t do anything because the property is no longer under your name.
Don’t disregard your mortgage rights.
Facing foreclosure proceedings can be discouraging. But this is not the right time to fret about it. Take a look at your loan documents and try to understand them. By doing this, you’ll know what your lender can do in the event you fail to make your payments.
Don’t fail to consider using other assets to reinstate your loan.
It’s no fun at all when you’re about to lose your home. More than anything else, your home is the most important thing you can give to your family. That’s why, if you have other assets such as a second car, jewelry or even an insurance policy which you may sell, make the most out of them to generate cash to reinstate your loan and to stop the foreclosure process.
Don’t hesitate to talk to a licensed attorney.
Foreclosure proceedings is a legal matter. If you want to have an in-depth understanding about your state’s foreclosure laws and the specified timeframes, it’s best to consult an experienced lawyer who specializes in handling foreclosure cases. Remember that talking to an attorney can help you protect your mortgage right, which a mortgage lawyer such as ones found here might be able to help you with.
We hope that the information mentioned above has provided you with some insights as to what not to do during the foreclosure of your home. While there are all available and honest means to save your home from foreclosure, it’s still essential to check your state laws to practice your rights. Lastly, don’t forget to exercise due diligence when seeking foreclosure help to prevent the situation from getting worse.
Daniel Grate is a professional writer in the law industry. She currently writes pieces on various law topics for the common reader. In her spare time she spends quality time with her family and friends.