Foreclosure is so stressful that you'll find yourself experiencing powerful emotions when you are faced with it. Your home is the most expensive, and most important purchase you will ever make, so the possibility of losing it is tough to reckon with. How do people do it?
You may remember from that mandatory psychology class in high school or college that there are five stages to the grieving process, according to the model introduced by Elizabeth Kubler-Ross. The model was initially applied to people dealing with death, but is applicable to any personal loss, including foreclosure. The five stages are:
- Denial: The first reaction many people have when they learn that they might be losing something important to them is to deny that it's happening. “There must be a mistake. I'm not going to lose my home.”
- Anger: When the person understands that this is really happening and denial can't last forever, they get angry at whomever they think is to blame or the nearest person to them. “Why is this happening to me? It's not fair. Those greedy banks are to blame!”
- Bargaining: The third stage involves the person trying to avoid the cause of the grief entirely through some action. “Maybe if I work really hard and tell the bank about my hardship they'll let me keep the house.”
- Depression: In the fourth stage, the person is saddened by the reality of their situation. “I have so many memories in this house. What am I going to do?”
- Acceptance: In the fifth stage a person accepts the reality of their situation, has stable emotions about it, and looks for a solution. “This is really happening, I wonder if there's anything I can do about it.”
Some people experiencing foreclosure get stuck in one stage and don't move on as quickly as they should. There are people who never move past denial. They bury their head in the sand, stop opening their mail, and don't have another place to live when the sheriff comes to evict them.
Others are stuck on anger and do some destructive things to their home before they leave it. Homeowners have poured concrete down the drains, left fish to rot in the attic, and ripped pipes out of the walls. All to get revenge on the bank.
Depression can be a big problem for distressed homeowners, unfortunately. People facing foreclosure are at a higher risk for suicide and stress-related health conditions.
We're all human and will experience some of the first four stages of grief when dealing with a loss. But it's the fifth stage, acceptance, that allows you to make a decision that can actually help you. As a homeowner in trouble, you want to move to acceptance as fast as possible so you can find the best solution for your situation.
If you're being threatened with foreclosure after missing payments, but want to keep your home, you may be eligible for a loan modification that lowers your monthly payment to an affordable portion of your income. Loan modifications allow you to stretch your loan term out over a longer period of time or lower your interest rate or principal. And it doesn't cost anything to apply for one.
If you know that you can't afford to keep your home, you may be able to sell it in a short sale or give it to the bank through a deed in lieu of foreclosure agreement. With either of these and a deficiency judgment waiver, you walk away with no debt. And that's a lot better than foreclosure.
The unknown is a huge contributor to stress when dealing with a potential loss. For people facing a terminal illness, there is no way to reduce uncertainty or avoid the inevitable. But foreclosure is not necessarily inevitable, even when you've stopped making your mortgage payments.
Once you've accepted your situation, the smartest move is to talk to a knowledgeable professional with experience helping people in your situation. Their experience can help you stop worrying about the unknown and start focusing what you can do to keep your home, which may be more possible than you think. Use caution, because there are scammers out there, so find a law firm with a proven record. Stop denying, being angry, bargaining, and being depressed, and start accepting and finding a solution.
Image courtesy of David Castillo Dominici at FreeDigitalPhotos.net