Facing foreclosure? Avoid these three mistakes with your lender
September 18, 2020
No family wants to lose their home. But despite how it may seem, foreclosure isn’t always a foregone conclusion. In fact, it’s possible to negotiate your way out of it in some instances—if you take the right steps.
Now is the time to show the bank that you’re serious about keeping your home, so make sure you avoid these mistakes:
Ignoring your lender
Did you receive notice from your lender about a possible foreclosure? Don’t just let it go. Denial only guarantees that you’ll lose your house.
You might feel overwhelmed by the situation, but you need to move forward. Follow up with your bank as soon as possible and address the situation head on.
Waiting to take action
If you’re treading water financially and don’t anticipate circumstances to change any time soon, don’t wait for things to get worse. Contact your lender. They may be willing to create a Workout plan in which you re-negotiate the terms of the loan.
Workout solutions might include extending a low introductory teaser interest rate, temporary forbearance, or waived legal fees and penalties that you’ve accrued.
Failing to offer alternative proposals
Contact a representative at your lending institution (probably in the Loss Mitigation department), and suggest a reasonable alternative to your current mortgage. Taking the lead will show that you’re determined to save your house.
You may want to find out about lowering your interest, and changing the terms from adjustable to fixed. Terms like these may extend the life of the loan, but will likely reduce your monthly payment.