A home isn’t just bricks and mortar for many people. It is an extension of their dreams, a mark of achievement and a matter of pride. Still, some homeowners do mistakes; fatal mistakes that can cause their homes to be taken away from them. I, for instance, witnessed many homeowners facing a foreclosure and they have all made the same blunders, more or less. Foreclosure can be avoided and your home can be saved. You just got to know how. Here are some blunders homemakers generally do:
1. Not Taking External Help for getting out of a Foreclosure situation: Information is available in abundance and there is really no need for you to pay up for agencies and specialists who tout to be able to help you to get out of your foreclosure problem. You don’t need them. Thousands of dollars as their fees can be blissfully avoided if you took the trouble of finding this information on your own. Many sites and blogs exists which dispense that information for free. Also, most homeowners end up as victims of foreclosure scams that is more like a mixture of salt and pepper on a fresh wound. Homeowners rarely watch out for scams wherein they innocently sign documents which entail transfer of ownership of property. To protect yourself, don’t pay up anything upfront — especially not without a valid contract ; read all the documents you will be asked to sign; do your due-diligence and perform research; take everything in writing and don’t forget to do due research on the background, reputation and competence of the company you are considering.
2. Not Using Lenders’ Extensive Expertise: The lender isn’t an enemy, but still many homeowners will do the mistake of thinking so. Even though the lender has a right to ownership of your home in the event of a foreclosure, lenders are still the original “go-to” people. Homeowners usually forget that lenders are not in the business of foreclosures and that each foreclosure is actually a financial drain on the lenders too — their money sits on that property which they can’t utilize for anything, really. Develop the habit of taking consultation from your lenders. They will be more than happy to help because it is in their interest that they get their money back each month and in full. Know your options, discuss with your lender, and try to work out a solution for your problems.
3. Not addressing persistent problems head-on: The dreaded reality of a foreclosure is now a reality; that is understandable, but inaction in such a situation is not. Many homeowners just freeze when faced with a problem like this. Not taking action here can cost you even more than doing something about it. Interestingly, they might give in to false claims and scam artists. Letting your home go is usually the last resort and if you are yet to pay your mortgage or if you are lagging behind in payments, there are simple solutions available for you — have talks with lenders, consider loan restructuring and much more.
4. Not moving quickly enough: Some events in our lives are bound to occur, but not doing something about it quickly enough is totally our mistake. Most homeowners don’t take quick and adequate measures to solve their problems leading to the hole getting wider and creating that vicious cycle that leads to even more problems. The clock ticks faster when foreclosure is up on the horizon and you must move fast. Banks put pressure, threaten to take your home away from you or even be forced to pay up the due payments plus fines.
5. Not Understanding that Uncle Sam Is Your Best Buddy: The government has been very thoughtful in this regard and has numerous programs for you to choose from to help yourself out of problems such as this. For instance, an interesting program called FHA Secure makes “traditional” FHA approved loans insured and backs it up by allowing you flexibility in choosing payment schedules, monthly out-pays and full-fledged lender support.
6. Not knowing that even debt has priorities: Hierarchy is everywhere – debt included. If you are the typical homeowner, you would have other bills to pay apart from the mortgage payments – like utilities, credit cards and the like. However, one of the things overlooked by many is the high interest and other kind of costs involved when such credit is not paid up. Not paying up mortgage leads to obvious problems leading to foreclosure. So prioritize and pay.
7. Under-estimating the power of a persistent approach: Starting from the learning curve involved – learning and educating yourself about your options, writing out letters, establishing contact with lenders, waiting for eons before you actually sit and talk to lenders. On top of that, there is no guarantee that anything fruitful would come out of it. The key here is to be persistent – almost to the point of being obnoxiously adamant—that you would see to the problem’s end.
8. Not thinking outside the box: Pressure, for some, makes some people think creatively; while for some it can stunt creativity. Most homeowners, however, lose the gift of creativity in the melee that a situation like foreclosure causes. Have you thought of various ways you can solve this problem? Think of finalizing a lender work-out, budget cleverly, think of ways to bring in extra income to pay-up the increased mortgage, lease or rent out your home, sell a part of your house, use your residence as a community meeting rendezvous and many more options require you to think straight out of the box and bring constructive solutions to the table.
9. Not buying your home smart: Even before you bought your home, there are various ways to ensure that you would never get into a situation like foreclosure. Again, awareness puts you ahead of the pack. Home Equity Line of Credit (HELOC) is one such way. Since emergencies like loss of job, natural perils, medical problems, etc., can sprout unannounced, the ability to grab access to low-interest credit becomes impossible then. Hence, programs like HELOC allow the homeowner to pick up extra line of credit in dire emergencies like those stated above. Care must be taken not to use this line of credit for unimportant expenses.
10. Not exploring other options like bankruptcy: When you file for a chapter 13 bankruptcy, you can actually stall the entire foreclosure drama. However, this should be your last card. Think and judge if chapter 13 is the best bet for you because it has certain disadvantages too, especially over the long-term. In case you do decide to go ahead, make sure that you pay heed to the process, deliver the filings on time and make the necessary payments.
Related posts:
- 3 No-Brainers To Save Your Home From Imminent Foreclosure
- 6 Incredibly Accessible Options to Avoid Foreclosure
- Lender Workout Solutions – Forebearance Agreement
- Stop Foreclosures in California — Don’t Let Your House Slip From Your Hands
- Lender Workout Solutions – Deed-In-Lieu of Foreclosure
Tags: Foreclosure, Foreclosure Blunders, Foreclosure Do's and Don'ts, Foreclosure Mistakes, Homeowner mistakes
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