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If you are going through financial hardship right now, then you may be trying to keep your home from being foreclosed. You may worry that you won’t be able to maintain your mortgage payments. Perhaps you have already begun missing payments and received notification about a foreclosure. The best thing you can do is stay alert to the problem and not ignore it as if it will go away. If you are being threatened with foreclosure, don’t give up. There may be options available to you so that you can remain in your home. If you are not sure whether you are headed for foreclosure, here are common signs that you might be:
- You have had a reduction in income
- You have lost a job
- You are in debt
- A medical emergency resulted in medical debt
- You had an unexpected large expense
- You went through a natural disaster
- Divorce from spouse who contributed to income
Usually, lenders do not want to foreclose on a home, as the process can be long and take up a significant amount of time and resources. It can benefit your lender financially to negotiate with you through a loan modification. The lender may choose to help you if you are not seriously far behind on your payments, are reliably employed, or have a variable mortgage rate that can be made into a fixed term mortgage. As a Connecticut foreclosure defense lawyer from The Law Offices of Ronald I. Chorches explains, you may need to provide paperwork that includes pay stubs, a hardship letter, bank statements, tax returns, and itemization of monthly expenses to finalize the process.
It is worth mentioning that if you have gotten behind on your mortgage, you do have the option of selling your home. With this route, you remain in control of what your future holds and won’t have a foreclosure on your credit report. This choice is best for those who cannot afford the home and whose property has accumulated equity since they purchased it. If you are someone who fits into this category, you may want to work with your lender to see if they would halt collecting mortgage payments until the sale is finalized.
If selling your home does not cover your outstanding mortgage amount, you may be able to have a short sale. Your lender would agree to absorb the proceeds of your sale, even if it falls short of what you owe them. If you want to do a short sale, it’s recommended that you seek guidance from a lawyer to ensure that you are not taken advantage of during the process. Because most people aren’t privy to the inner workings of home buying and foreclosure, they may not realize when something is not in their best interests.
You may be worried that your lender will deny a modification or not offer methods to avoid foreclosure, but they are likely to if you meet the criteria they ask for. Homeowners are encouraged to talk with their lender and find out if they are eligible for options that keep them in their home.