When you fall behind on the monthly payments for your home mortgage, you may be faced with a foreclosure letter. You are usually given a grace period of 60 to 90 days, depending on your lender’s late payment policy, before you receive such a letter. You will receive notification, however, that your loan is in a state of default and needs to be paid back to current. You will be given a designated amount of time to fulfill your loan obligation, or your lender will begin foreclosure proceedings. Before you panic, you need to think carefully about the options that are at your disposal and make a rational decision.
Your Options after a Foreclosure Letter
Many people who are told by their lender that foreclosure proceedings will begin just automatically assume that there is no other possible outcome and they are completely at the mercy of their lender. This, however, is very seldom the case. Instead, you have several other options available to you:
- Request an Extension - Banks often lose large amounts of money in foreclosure proceedings, so have your lawyer meet with you at your lender’s place of business to sit down and discuss an extension on the grace period you were given to bring your loan up to date on the payments. Your lawyer can present your case in terms your lender can readily identify with, and propose a reasonable amount of time for you to make payments on what is due while you catch up on your loan payments.
- Attempt to Refinance - The government has instilled programs to help homeowners at risk of foreclosure by allowing relaxed qualifications for refinancing or loan modifications. You may very well qualify for one of these programs, which in many cases can adjust the rate of your monthly payments to a lower amount. The negative effect of this program is the fact that you may end up paying more in overall interest due to the term of the loan being extended, but if you’re in danger of losing your home the extra interest should be considered well worth it.
Get Help
The moment you realized you were in financial trouble, you should have contacted your lender immediately. However, if your lender proved unwilling to work with you and has decided to foreclose on your property, the first person you contact should either be your lawyer, or an attorney referral service. A lawyer can look over the details of your case and let you know whether or not you have any means of either reversing or stopping the foreclosure.
