The good news is that lenders don’t actually want your home. With home prices falling and industry standards changing, banks and lenders are better off keeping you in your home than kicking you out.  They have options to help borrowers through difficult financial times.

What NOT To Do:

First and foremost, don’t lose your house to foreclosure recovery scams! If any firm claims they can stop your foreclosure immediately, and if you sign a document appointing them to act on your behalf, you may well be signing over the title to your property and becoming a renter in your own home! Never sign a legal document without reading and understanding all the terms and getting professional advice from an attorney, a trusted real estate professional or a HUD-approved housing counselor.

Do not put your trust and money into a foreclosure prevention company. You don’t need to pay exorbitant fees for foreclosure prevention help. Companies will promise to negotiate with your lender on your behalf.  These may or may not be legitimate businesses, and they will charge excessive fees — two or three months of mortgage payments — for services your lender or a HUD-approved housing counselor will provide free if you contact them.

Don’t ignore the letters from your lender.  The first notices you receive will offer good information about foreclosure prevention options that can help you weather financial problems.  Later mail may include important notices of pending legal action.  Your failure to open the mail will not be an excuse in foreclosure court.

Make sure that any plan you agree to with your lender doesn’t increase your monthly payment but reduces it to one you can handle for the long term.

What To Do:

If you have received a notice from your lender asking you to contact them, or if you are unable to make your mortgage payment ACT QUICKLY! Contact your  lender immediately and ask about your mortgage rights.

Find your loan documents and read them so you know what your lender may do if you can’t make your payments.  You will need to get the facts on foreclosure prevention (also called loss mitigation) options and learn about the foreclosure laws and time frames specific to Florida.  Call or visit the Florida Government Housing Office online.

Can You Rearrange Your Spending?

Your health and your house should be your first priorities.  Examine your income and budget. Can you cut spending in order to make your mortgage payment?  Realistically, you may have to discontinue optional entertainment expenses or renegotiate payments on credit cards until you have paid your mortgage. Have you considered all your expenses?

You may want to consider selling a second car, jewelry, or a whole life insurance policy to help reinstate your loan.  Can anyone in your household get an extra job to bring in additional income? You may want to consider borrowing from a family member. These efforts can demonstrate to your lender that you are willing to make sacrifices to keep your home.

What Your Lender May Offer

If your problems are temporary due to recent medical bills or a lay off, your lender is more likely to work with you on a short-term solution.  A cooperative lender may give you a deadline to make up missed payments in one lump sum, or might offer to freeze your monthly statements until you can resume payments as usual.

The most likely short-term scenario is that your lender will offer a repayment plan — one that includes your regular monthly payments plus a fraction of what you’ve missed, until you’re all caught up.

Depending on your circumstances, your lender may even be willing to modify the terms of your loan entirely. The bank can extend the amortization period (the time you have to repay your loan), lower your interest rate or change it from an adjustable rate to fixed.

If You Need to Sell Your Home

Your lender will set a deadline for you to find a buyer and pay off your mortgage balance. Keep in mind that if you sell for less than you owe, you could owe income taxes on the difference.

If you are not eligible for free legal assistance and if you don’t feel your lender is offering you the best arrangement, seek advice from a foreclosure attorney. Our firm has dozens of foreclosure clients, and we offer a free 15-minute consultation and reasonable rates. Just call 954.573.1444 to arrange an appointment or send us a message from our contact page.