You’ve learned the scary news that you might be losing your house, but you don’t want to move! (If you happened upon this page and believe you do not want to keep your house, take a step back to How To Avoid or Stop Foreclosure.) If you want to keep ownership of your house, remember above all that the bank only forecloses as a last resort. They do not want to take your house! They only make money when you make payments and foreclosing on a borrower’s house is a costly and clunky process.
Speaking of clunky, did we mention banks are giant corporations? As you move forward into conversations with your bank, you’ll see that some “words to the wise” will be helpful in navigating all the paperwork and phone calls. We’ll provide those later in this article.
Your best option to keeping your home and avoiding foreclosure is Loan Modification.
This is the process of talking with your bank about how you can change the terms of your loan to enable you to get back on track making payments and get out of foreclosure. Possible strategies include:
- A deferment of payments for temporary relief from making monthly payments
- A payment plan to make up missed payments (in addition to monthly mortgage payments)
- A lower interest rate
- Lower monthly payments
- Perhaps even a reduction in the principle on your loan
When negotiating with your bank, be sure to keep in mind these pillars of wisdom we’ve learned by working with banks:
- Always be respectful, and don’t be afraid to show you are human. Let them understand your situation and that you are trying. Bankers have emotions, too, and they’ll respond to your story.
- Over-communicate with your bank. Let them know about your progress regularly. The more they know, the more they can work with you.
- Keep good records of your conversations with the bank. You need to be able to hold them to what they said or promised by having it in writing!
- Always stick to deadlines, and over-communicate if you are having trouble on a task or payment.
Your last resort to keeping your home is bankruptcy.
Bankruptcy is the process of a public filing and status allowing you and your team professionals to re-negotiate terms on all your debt. It is a very serious matter and is only recommended if you are in financial distress in many areas of your life. This will wreck your credit for years to come, though you will be able to retain most of your assets.
The sooner you begin tackling the foreclosure giant, the better your results will be. If at any point you discover or decide that keeping your house isn’t the best plan, you can click here to learn more about your options for avoiding foreclosure by selling your house. If time is of the essence, you can give us a quick call at 615-455-5979 or we can call you.