Simple Steps to Avoid Foreclosure

"It's not so important who starts the game but who finishes it."

- John Wooden

Foreclosure is the legal means that a lender can exercise to repossess your home. When this happens you must, by order of the court system, relinquish all rights of ownership and you must find another place to live. The psychological and financial impact that this process can have on your family could be irreversible and can take years for a person or family to recover from this.

If your property is worth less than you currently owe on it, your lender may also get a deficiency judgment against you, which is a judgment against a borrower in favor of the lender in an amount equal to the difference between the funds received from a court sale of property and the balance remaining on a mortgage or other loan. So not only will you lose your home, you would still owe any additional amounts.

I saw the writing on the wall and knew this problem would be coming a few short years ago when lenders were giving pretty much anyone with a pulse an "adjustable rate" (ARM) mortgage. The rates are now "adjusting" which means the interest rate can double dramatically affecting a homeowners monthly payment. For example, what you were once paying $800 a month for can now be $1300 or more. For a lot of consumers, this is unacceptable and they quickly fall behind on their payments and legal remedies are sought by the lenders

Both foreclosures and deficiency judgments could very seriously affect your ability to qualify for future credit. So you should try to always avoid these actions that can be taken against you. But there are steps that you can take, as a homeowner, to save your property and get caught up with your payments.

The number one thing that many consumers must do is keep in contact with your lender. If you are having problems making your payments, contact your lenders loss mitigation department without delay. Explain your current financial situation to them. They may be able to help before it gets too late and out of control.

For more information, contact Dave Capra "The Debtonator" Visit him online at: www.yourguidetoperfectcredit.com or call 1.888.369.0429 (office) 1.630.433.0303 (cell) Email: thedebtonator@yourguidetoperfectcredit.com

Credit: Dave Capra

Copyright: The Debtonator