Money is a very personal issue. So much so that it's often considered in bad taste to talk about it in polite society. Especially when you're talking about problems with money. And foreclosure is the mother lode of money problems since most people's largest asset is their home.
But unfortunate events beyond the control of any homeowner have caused millions of people to have to reckon with foreclosure. The credit crisis, recession, and housing crisis have caused foreclosures on a scale that the country hasn't seen since the Great Depression.
If you're in danger of losing your home to foreclosure, you're likely experiencing some seriously negative emotions. Fear, uncertainty, shame, guilt, and anger are common. These emotions are completely understandable and just as useless. You have to get a handle on them to keep from going crazy and find the best resolution.
Here are some ways to do that:
Know that it's not all your fault.
Sure, in hindsight you can think of a lot of things you would have done differently. And everyone who gets a loan is responsible for paying it back. But most people who fall behind on their mortgage payments have experienced terrible hardships that were often beyond their control. Hardships like a medical problem that costs a fortune and keeps you out of work, or a change in the national and global economy that leads your employer to lay you off are not things that you can control. Take responsibility for what you can control, but don't beat yourself up over what you can't.
Don't hide or live in denial.
Overcome with dread, some homeowners stop opening their mail, hide information from their spouse, and resign themselves to the fact that they're going to lose their home. Ignoring your mortgage problems will not make them go away. There's really no such thing as “letting nature taking its course” as it relates to foreclosure. Even moving out and mailing the keys to the bank won't be the end of it. When you don't do anything your home will be sold at a foreclosure auction sooner than if you had responded to the summons and complaint, you'll be kicked out of the property by the sheriff, and your lender can sue you for the difference between what your home sold for and the amount you owed on your loan. All of those things could have been avoided or their negative impact lessened by being proactive.
Get an education.
Uncertainty is one of the biggest contributors to anxiety. You don't know what's going to happen and when and it's making you a nervous mess. Fortunately there are free resources online that can tell you everything you need to know. There are hundreds of blog articles on this website to help you educate yourself. Find out if you live in a judicial or nonjudicial foreclosure state, what you should do when you're served, and how to take advantage of government foreclosure prevention programs. Just being aware of the right information can ease your stress.
Now that you've educated yourself and acknowledged the reality of your situation you're ready to take some steps toward improving things. If you want to keep your home but don't have enough cash to reinstate your loan, a loan modification may be your only hope. Fortunately for distressed homeowners, loan mods don't cost anything and bad credit is not an issue. If you can't keep your home, there are ways to exit it without going through foreclosure, such as a short sale or deed in lieu of foreclosure agreement. You can avoid being sued for the deficient amount and even be paid cash for your relocation expenses with some options. All the information you could ever want on foreclosure alternatives is available for free on this site.
If there's a drawback to these foreclosure alternatives it's that they are often hard to achieve on your own. You can apply for a loan modification on your own, but most people who do are denied. Whatever you want to do, getting an experienced attorney on your side is never a bad idea. A lawyer with a successful record helping people in your situation should be able to defend you from foreclosure and work toward the permanent solution you desire. You can check out our tips on selecting the right foreclosure defense attorney for your needs here and here.
Foreclosure is a major life stressor and one that often coincides with other negative life events. Remember that if you're in foreclosure, you have a lot of company. There are a million people currently in some stage of the foreclosure process and six million have already lost their homes because of it. Even celebrities like Burt Reynolds and Evander Holyfield have been through foreclosure. There's no guarantee that you can get the results you want, but if you follow these steps you can improve your odds and start to reduce the stress and uncertainty associated with your mortgage.
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