10 Surefire Ways to Prevent Foreclosure
Our many years of working with distressed property owners have taught us some valuable lessons about how to prevent foreclosure.
- Save money for a rainy day: Sure, saving can be hard to do. But we can guarantee that someday you'll face unexpected expenses. Maybe even a temporary loss of income. When that happens, you're sunk if you have no savings to fall back on. As a rule of thumb, you should have enough savings to cover your basic living expenses for up to 6 months. Don't wait! Start saving what you can today. It may be only a little, but over time it will add up.
- Stay in communication with your lender: Most lending companies understand that people can temporarily fall short on income and behind on their mortgage. Talk to your lender before you fall behind and it'll be easier for them to work with you. Most lenders have programs to making your home more afforable in place to help homeowners avoid foreclosure. Lenders do not want you to lose your property. For them foreclosure is a failure. They are in the business of loaning money, not owning houses. However, if you stop communicating with them, they'll have no choice but to begin foreclosure proceedings.
- Learn all of the options available to you: When you know your options, you can make a decision that works for you and your family. Keeping a house that is a huge financial burden may not be a wise move. Likewise, unloading your house at a "fire-sale" price is probably a bad choice too. When you know your options, you can take action early, when you're still in control. You can make your own decisions. You aren't at the mercy of debt collectors and foreclosing lenders.
- Always pay your mortgage payment before other debts: Ask yourself this, “Would you rather lose your credit cards or your house?” Often, people will pay credit cards and make car payments first. Then when it comes time to write a check for the mortgage, the money is gone. If you are facing financial trouble, missed mortgage payments will almost certainly prevent you from refinancing you house. Missed mortgage payments damage your credit far more than any other debt-payment failure.
- Don't deny you have a problem: Everybody runs into financial snags in their life. The difference is in how and when you face them. The longer you remain in denial about your financial problems, the less time and fewer options you'll have to solve them.
- Ask for help: When it comes to foreclosure, DON'T LET PRIDE get in the way of solving the problem. We know it's tough to face losing your home. We know that you are likely to feel shame and embarrassment. We know that the last thing you may want is for your family and friends to be aware of the problem. We also know that if you are foreclosed, those same family and friends are sure to learn about it. A stranger will be the one to tell them, or they'll see the notice in the newspaper. You won't be able to hide behind you pride when you're out in the street. It's a lot better if family and friends hear about the situation from you, and sooner rather than later. You'd be surprised how often family and friends step up and offer help. Your family, your friends, even your church may be ready, willing, and able to help you avoid foreclosure.
- Don't ignore your mail: Open all mail immediately! When you are in a mortgage default situation, you should diligently read all of your mail. Notice of important dates pertaining to foreclosure will come in the mail. You may be sick of bill collectors harassing you by phone and mail, but you'll be a lot sicker if you open a letter that arrived a month ago and find that your house was sold at foreclosure auction a couple days ago.
- Don't think that you have no options: Even if your lender is returning partial payments and demanding all of your back payments now, you have options. The lender wants to find a way to work with you, not take you home. But keep in mind that as your foreclosure date draws nearer, you'll have fewer and fewer options. Foreclosure is a process that can be influenced as it moves toward the fateful day of an auction sale. You have options throughout that process.
- Be careful about accepting help from companies specializing in foreclosure: Do not commit to one unless you fully understand the specifics. How are they going to help? What is their track record for following through and delivering what they promise? Signing up for assistance does not guarantee that your foreclosure will be stopped. Make sure you've checked into the company’s background with the Better Business Bureau. If you're dealing with a realtor, check with the realtor board. Attorneys should be checked out with the Texas Bar Association. You need to understand the risks associated with stopping your foreclosure.
- Act today: Don't let any more time pass without taking action. You have more options today than you will have next week or maybe even tomorrow. While you ignore the situation or put off doing anything, your credit is being damaged. Your equity in your house is being eaten away. Time is money, and the time you waste will be measured in your dollars. We can’t urge you enough to start making phone calls and learning your options this very minute. Many times, people have called or written us a day or two after their house was foreclosed upon and we've had to inform them that it was too late. If only they had called us a few days earlier!
If you or someone you know is facing with foreclosure on your Houston home or you have any questions about the foreclosure process in Texas, please contact us immediately!