You've only got one family, and supporting them when times are tough is the right thing to do. After all, they'd do the same for you.
But what if a member of your family has a problem that's too big for you to solve, like difficulty with their mortgage?
Over the past decade millions of people have been in just that situation. Since the Great Recession began, seven million homes have been in foreclosure! That's a lot of affected families.
And the foreclosure crisis isn't over. There are still thousands and thousands of homeowners either in foreclosure or on their way to it.
So what can you do if a member of your family is among them?
1. Listen to them
One of the greatest things you can do for someone going through a hardship is to listen. And it doesn't cost a thing.
Listening does not involve offering solutions, telling them it's not as bad as they think, or recommending that they look on the bright side. Listening means hearing someone's story and letting them know that you understand what they're going through.
After you do that, they should feel a little better and will be more open to suggestions on how to improve their situation. But no one wants to hear your advice about where they can go until you've demonstrated that you understand where they are.
2. Give them money
Depending on your family member's situation, a little bit of money may be all they need to get by. If they haven't yet defaulted on their mortgage, and had a temporary financial hardship that they've recovered from, then a one-time cash infusion makes sense. Just make sure that what you give is within your means and that your family member has the income to afford the property.
It's not a good idea to spend money on a loan that's unaffordable in the long term. Some homeowners will spend their savings and retirement money on their mortgage, hoping that a miracle will happen to give them the income to afford their property. If that miracle never happens, then they eventually fall into foreclosure anyway, but with no money in the bank.
If a mortgage is truly unaffordable, and there's no reasonable scenario where it could become affordable, then the homeowner should look into a way to exit the home gracefully. A short sale or deed in lieu of foreclosure is a better option than foreclosure. And a cash for keys agreement gives the homeowner some money to move out.
Giving money to a family member struggling with their mortgage can be a big help, just make sure you aren't throwing good money after bad.
3. Consider cohabitation
If your family member is trying to get a loan modification, and is having a hard time convincing the bank that they have enough income to afford the loan, taking someone into their home could help. Maybe a member of the family could move in and rent a room or help pay some bills. That money can be enough to help them qualify for a loan modification and avoid foreclosure.
And, if the worst happens and your family member loses their house, you can open your home to them.
4. Give them advice, or point them to an expert.
Foreclosure, real estate law, and loan modifications can be very complicated. If you have experience with those subjects, give your advice. If you don't have relevant experience or knowledge, you should direct your family member in the right direction, such as to a qualified attorney. A good attorney should offer a free consultation and only take your case if she believes she could help. You can download a checklist of what to look for in a foreclosure defense attorney and share it with them.
Foreclosure is a major life event that causes considerable stress. People experiencing it are at increased risk of suicide and mental and physical health problems. It's good to be available for your family when they're going through a tough situation like foreclosure, but it's not enough to help them save their home. For that, they may need to work with a professional.
Image courtesy of Stuart Miles and Serge Bertasius at FreeDigitalPhotos.net
