I’ve Paid For This Twice Already…

Tips For Surviving Foreclosure Chaos

This is a guest post from glblguy at Gather Little By Little, a Christian personal finance blog focused on growing wealth using common sense biblical practices. If you like this post, subscribe to their RSS feed!

More than a million homes could potentially face foreclosure this year. This is 30% more than in 2006. People are panicking and looking for any way out they can. Scammers are making the situation worse and taking advantage of people.

Here’s a few tips to help you survive the chaos:

Know Your Rights

Read over your loan documents and papers. Look on your state’s website and learn about the foreclosure rights in your state. You can do this by easily by visiting your states website and searching for “Foreclosure rights”.

Prioritize your spending

Review your life basics and pay for them first. After food and clothing, your home should be your next priority. I would suggest building your budget by starting with life basics first, then adding in other expenses. Are other debt collectors calling? They can wait.

If you have student loans, place them on hardship deferral until you can get your foreclosure chaos taken care of.

If you have items you can sell to reduce your monthly payments or maybe even profit from, sell them. Don’t lose your house to keep your car, boat, RV or motorcycle.

Contact Your Lender

As soon as you have a problem paying your mortgage, contact your lender. Most lenders want to help you keep your house. They don’t want the hassle of having to foreclose and sell the home, it costs them money. They’ll often work out a plan with you. Remember, when you lose your home, they lose too.

Call HUD

HUD, the Department of Housing and Urban Development offers free and low-cost counselors in addition to providing information on avoiding foreclosures. HUD is available at http://www.fha.gov or by calling 1-800-569-4287.

Respond to all mail or calls from your lender

If you receive mail from your lender, make sure you read it. Early letters often provide options or opportunities to discuss options with your lender. Make sure you take advantage of them. Later letters are legal notices and by that time the lender isn’t going to be too open to discussing options.

Avoid Scams

Don’t be fooled, you don’t have to pay a fee for foreclosure help and assistance. If a company claims they can stop your foreclosure, don’t sign anything and don’t believe it. Work with your lender not “Foreclosures R Us”. Always remember, if it seems too good to be true, it is.

In a common scam called “equity skimming” a so called “buyer” offers to repay the mortgage if you sign over your deed and move out. All you get is the mortgage in still in your name and no house. Don’t look for the short or easy way out.

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