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What steps can you take to avoid foreclosure?

For some Massachusetts residents, financial problems can become very concerning and overwhelming. For those who own a home, financial challenges can make it difficult to keep up with mortgage payments. This could result in a homeowner facing foreclosure on top of other financial problems.

What steps can you take to avoid foreclosure? The first step a homeowner should take is to talk to their lender. Many lenders are open to the idea of working with borrowers who are having problems making their payments. A lender could help a borrower obtain forbearance, loan modification, reinstatement, develop a repayment plan or even refinance their mortgage.

Homeowners could also seek assistance from foreclosure prevention counselors. There is HUD-approved non-profit counseling available, and they provide free advice. These counselors could help homeowners determine whether they qualify for loan modification or a refinance program. Borrowers should be wary about counseling agencies that charge a fee for this advice. This could be a scam and could put the borrower in a even worse situation.

Another option is to file for bankruptcy. Even if a lender has already initiated the foreclosure process, a borrower is able to temporarily delay the process. The bankruptcy process puts an automatic stay on all debt collection activities. This also includes the foreclosure process. This delay could help the borrower save up enough money so they can become current on their mortgage. This also gives them the ability to negotiate with their lender so they can keep their home.

It is never easy dealing with money problems. It is especially troubling if a person is facing the possibility of losing their home. In this matter, it is important to understand what steps you can take to better your situation. This could help you overcome your financial troubles.

Source: Findlaw.com, "How to Avoid Foreclosure," accessed April 9, 2017

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