Missing payments on your mortgage puts you at risk for foreclosure. If a homeowner is unable to make required mortgage payments, the creditor is allowed to seize and sell the property. This is known as foreclosure. There are certain disadvantages associated with this process. Individuals who have gone through foreclosure have to wait a specific period of time before buying another home. They suffer from a drop in their credit score which reduces their chances of obtaining credit in the future.
The good news is that is possible to avoid foreclosure. There are certain steps you can take to avoid foreclosure. These include requesting for a reinstatement, contacting your loan servicer, getting a loan modification or selling your house. Hiring a foreclosure prevention counselor may help you if you are having a hard time keeping up with your mortgage payments. Beware of counseling agencies that charge a fee for advice or make a deal to rescue you from foreclosure. Such agencies may be setting you up for a scam.
Communicating with your lender may prove to be in your best interests. When working directly with your lender, arrangements can be made which may prevent eviction. Your lender may discuss several suggestions with you. Some of which might include forbearance, loan modification, reinstatement, repayment plan and refinance.
But if you find the situation cannot be improved with the aforementioned methods, you may file for bankruptcy if you are still unable to afford the mortgage payments, or if your home has already been put in foreclosure. Once you are declared bankrupt, all debt collection activities will be put on hold. These activities include foreclosure proceedings. This grace period allows you to get out of debt or negotiate a deal with your lender.
You may want to consider hiring an attorney to help you consider all your options before making a move. A skilled attorney will help explain the intricacies and complexities of the process to you so that you can then make the best decision.