No one wants to receive a foreclosure notice, but sometimes these things happen. Maybe you lost your job, are going through a divorce or are facing a pile of medical bills. Many situations can make money tight at home.
Whatever the reason you are struggling with your mortgage, you should know there are ways to prevent losing your home. Here is what you need to know about preventing a foreclosure.
Do not just stop paying
Though you may be embarrassed about your money problems, you should not just stop paying your mortgage. The further behind on your mortgage you get, your outstanding balance increases and it will be harder to pay this amount later. Also, the more payments you miss, the more likely it is the lender will start foreclosure proceedings.
Reach out to your lender
It is best to reach out to your lender before you even miss a payment. You should contact your lender as soon as possible. Remember, they do not want your house. That is not the business they are in. Your lender should be able to work with you to create a plan that helps you through this rough period. That could involve refinancing your home or lowering your loan payments.
Check your mail
You likely feel overwhelmed about your inability to pay your mortgage. However, it is a terrible idea to ignore mail you receive from your lender. If you are behind on your payments, the lender will typically send out notices that give you information about how to prevent foreclosure. If you are farther along in the process, your lender will also notify you of any legal action regarding your home. Missing a notice is not an excuse, and it could cause you to lose your home.
Contact programs designed for your situation
The federal government has programs designed to help homeowners in danger of foreclosure. The Making Home Affordable (MHA) program offers advice from free counselors and can help you stay in your home. You can call the MHA program at 1-888-995-4673 or go to the website. You can also contact the District of Columbia Housing Finance Agency. Or if you have an FHA loan, you should reach out to the FHA directly.
Try to come up with extra cash
You likely have already racked your brain, but you should consider all options. Cutting your cable is probably not enough to make the difference, but what about selling one of your cars? Maybe you have some jewelry you could put up for sale? Or perhaps you or your partner could pick up another job? These options may not make up the entire difference, but it could help prove to your lender that you are making every effort to pay your mortgage.
Do not fall victim to a foreclosure scam
There are companies that claim they can stop your foreclosure, if you appoint them to act on your behalf. Many of these companies are scammers looking to take your money and maybe even your home. Do not fall victim to their claims, and do not sign any legal documents unless you have an attorney review the forms.
You will receive a notice
Before a foreclosure can proceed, the lender must send you a notice of default. This notice will include what you need to pay to stop the default and reinstate your loan. In Washington D.C., this notice will also include information about mediation and housing counseling services. You will have 30 days to return the form if you want to participate in the foreclosure mediation.
Washington D.C. offers foreclosure mediation
During foreclosure mediation, you meet with your lender and a mediator to discuss options to prevent a foreclosure on your home. It does not guarantee your foreclosure will be stopped, but it can improve your options.
Being behind on your mortgage is certainly not ideal, but it is not the end of the world. You have many options to prevent foreclosure, and you should use the resources available to you.