The good news about foreclosures is that in this
market, the last thing the banks or lenders want to do is to foreclose on your
home, which will be added to a growing inventory of unsellable houses. Now,
while lenders may not want to foreclose, they won’t hesitate to file a notice
of default to protect their interests.
If this has happened or is about to happen to you,
please do not ignore the situation at hand, hoping that it may go away. It will
not. The problem will escalate, and you will lose your home before you know it.
Based on your financial and personal situation, you
have a few options in avoiding a pending foreclosure:
1. Pay the money owed – as easy as this may sound,
there may be ways for you to come up with the arrears amount, whether by
borrowing from relatives, selling off your unused vehicles, or converting items
of value into cash. There are ways to increase your cash flow, and a skilled
specialist can show you how, in your specific situation.
2. Create a forbearance agreement – this agreement
between you and the lender details the action you will take in the upcoming
months, to pay back the arrears amount. This plan of action is also called your
repayment plan, or repayment proposal. A lender typically will consider a
forbearance agreement because they will much rather prefer you pay back the
money on a repayment plan than to try to sell the property. An example of a
repayment plan is as follows:
Pay $1000 per month for three months, and then pay
$1500 per month for another six months, to get the loan back to current. If
this is not achievable, then both parties agree on the action of foreclosure.
3. Refinance your mortgage – Firstly, speak to your
current lender and depending on your debt to income ratio, they may wish to
provide refinance for you. If they reject or do not respond to your request,
you have the option of contacting other banks or local credit unions in Broward
County. The refinance with credit unions may be at a higher interest rate, but
at least it gives you some room to work out your financial situation.
4. Sell your home – this may be the hardest choice
to make. Obviously, if you have equity in your home, then selling it may
achieve a much higher price than what you would receive at foreclosure. If you
owe more than the value of your home, then you may want to engage in a short
sale. Many real estate agents are ready to buy homes on short sales, so you
could always contact any one of them to help you out of any sticky situation.
5. Lodge a complaint to your Ombudsman – The purpose
of a financial ombudsman is to assess whether financial institutions have acted
correctly per their lending policies, which may include taking legal action
against you incorrectly. Even if the legal action was taken correctly, and the
bank has done nothing wrong, the financial ombudsman may also be an
intermediary for you to negotiate a repayment plan with the lender.
6. Speak to a specialist – losing your home will be
the last thing that you want, so don’t try to handle a pending foreclosure by
yourself. Get help from a specialist, whether it is from your local legal
center, a lawyer, or a financial counselor.