If you don't meet your mortgage each month, you could be in foreclosure. Foreclosure is the legal tool that your lender can use to repossess (take possession of) your home. When this happens, you must move out of your home. If the price of your property is less than the total value of your mortgage loan, they can claim for a deficiency judgment. If that occurs, not only will you lose your home, but you will also owe an extra amount to your lender. Both foreclosure and deficiency judgment could change your ability to borrow in the future.
Here are some tips to avoid foreclosure.
Take calls from your mortgage broker. Or even better, call your mortgage servicer as soon as you know you can't make your monthly payment. Explain to your servicer why you cannot make your monthly payment and seek guidance to avoid foreclosure.
Suppose you can't get what your mortgage manager needs, attempt expert help from the housing counseling agencies near you. Visit consumerfinance.gov/mortgagehelp or call (800) 569-4287 and enter your zip code to find a HUD-approved housing counselor. Counselors can design a personalized action plan and help you work with your mortgage company.
Beware of the scam. Never sign a legal document without reading and understanding all of the terms of consulting with an attorney, trusted real estate professional, or HUD-approved advisor. It would be best if you didn't have to pay anyone to help you avoid foreclosure. The aid you need may be available at no cost to you through your administrator or a HUD-approved housing counseling agency. Scammers try to take advantage of owners who get into trouble by requiring a lot of money, even thousands of dollars, for false hopes of help.
Suppose you present a completed application to your servicer well ahead of time in advance. In that case, your servicer should notify you of the opportunities you have for managing your home or leaving it if it makes more sense. Housing counselors have a lot of experience helping people work to avoid foreclosure. They can help you with the complicated steps to understand your options and request help. The mortgage servicer cannot start foreclosure while being evaluated or meeting the requirements for a loan modification. So, go ahead and don't delay. The earlier you complete the application, the more protection you get.
I am pleased to think that American families would do everything possible to keep their homes. You have realized the importance of owning a property for tax benefits, specifically in the form of deductions. Plus, homes are valued over time, allowing you to make a profit when you finally decide to sell.