Foreclosure is not a good solution for anyone. The debtor will lose out because they will lose their home and any payments they have made toward the mortgage. The creditor also loses out because they have to put a lot of time into attempting to collect missed payments, and they’ll also likely not receive all of the debt that they were owed by selling the home.
It’s for this reason that the debtor often has the power to stop foreclosure in its tracks. A foreclosure only occurs as a last-resort – usually when the debtor has not cooperated with them. The following are some things that you can do to negotiate with your lender and successfully prevent foreclosure.
Communicate with your lender as soon as you anticipate a problem
Most people do not communicate with their lender until after they have failed to pay their mortgage on time. The earlier you take action to address a potential problem, the better. For example, if you are suddenly made unemployed, you should take immediate action and contact your creditor to alert them of the problem.
Suggest loan modifications or forbearance
There are many options available to those who are having difficulty in keeping up with their mortgage repayments, and usually creditors will want to help you by offering these. By remortgaging your home, you may be able to free up some cash that will help you in the short-term. Alternatively, your lender may give you a forbearance, meaning that you will not have to pay your mortgage for a few months.
Don’t assume that foreclosure is the only option if you’re struggling to pay your mortgage. Take action to learn more about the options available to you.