Why Foreclosures Happen

Foreclosure Sign

When you fail to pay your mortgage, foreclosure is one result that you can expect. This is the bank's way of legally taking back your home to recoup the loss that they are experiencing, because you're not making your payments. If you have gotten into a financial situation where you cannot pay your mortgage, you need to take action. Doing nothing is a proven path to foreclosure.

But even though it might seem scary and overwhelming at first, there are many solutions that you can work out if you just ask for help. Learn now how to avoid and stop foreclosures.

What Do I Do to Avoid Foreclosure?

Don't ignore your lender's attempts to contact you. Any letters, phone calls, or other communications that you received need to be taken seriously. If you are having problems, you need to talk to the proper department that deals with hardship assistance and/or loss mitigation. These are the people that can help you if you are willing to explain your situation. Make them aware of what is going on, including your financial information and any events that have caused you to be unable to pay your mortgage. Don't move out of your home, because this may ruin any chance you have at avoiding foreclosure as it is seen as abandonment.

What Options Do I Have?

A lender may be willing to work with you to avoid foreclosure. You need to contact them and ask them what they can do to help. They may offer a special forbearance, which is ultimately a chance to arrange a repayment plan. They might also be willing to modify your mortgage, either by lowering monthly payments or extending the term of the loan. If you cannot actually save your home, you might consider a pre foreclosure sale or a deed-in-lieu of foreclosure, which is essentially volunteering to give your house back to the lender.

Don't let yourself be so desperate that you fall victim to a scam. There are many times when a solution will sound too good to be true, and it usually is. Watch out for buyers that seem too eager to get their hands on your deed, and counseling agencies that seem fishy. Even though they might act like they want to help you out, these people are generally scam artists try to take advantage of your difficult situation. For more information about avoiding foreclosure, browse around our website.

Check below a video explaining what are your options when facing foreclosure according to some specific US lenders:

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