There are at least 10 foreclosure avoidance strategies that can be used to fight foreclosure. In order to know which to use, it’s important to understand the most biggest factors involved. Here are the three most powerful weapons against losing your home.
1. Time
Understanding how time impacts a foreclosure is critical. When action is taken early, the foreclosure process can be avoided altogether. The more time that elapses, the fewer and less attractive the options become. Acting early is the difference between a forbearance and a public auction.
Earlier, we discussed the timelines of foreclosure and how long the process takes. Those numbers serve as guidelines for each part of the process. They don’t account for admin delays and the judicial process. Timelines are also shifting due to the effects of the COVID-19 pandemic.
The full foreclosure process can take up to 2-3 years from default to sheriff sale under normal circumstances. That’s a lot of time to begin researching options for resolution. It’s also a lot of time for a lender’s legal fees or penalties to pile on and add to the debt owed. Getting the conversation with lenders going early can be key.
2. Communication
When debtors are in default, they’re often not motivated to contact creditors. Instead of dodging, approach lenders immediately and often. Financial institutions have several loss mitigation solutions for many different scenarios. Pro tip: keep a record of your conversations.
Also, be sure to communicate with those who will be immediately affected by the foreclosure. Too often, when the financial head of a household is in denial or ashamed to disclose a hardship to their spouse.
Presenting the situation to a spouse could result in pooling resources to find a resolution. It may also be a valuable lesson to teach children in the house that are old enough to understand finances. Pro tip: we strongly advise against disclosing this to children who aren’t old enough to understand discretion.
3. Action
The most crucial weapon homeowners can leverage against foreclosure is ACTION. The prospect of losing a home to foreclosure can be crippling. Often, the last thing that homeowners want to do is deal with bills they’ve fallen behind on, and feel they can’t pay.
If you’re physically able to, call that lender to work out a settlement or modification, call that real estate agent to list the property, or call someone who can provide cash relief. Whatever the course of action, there needs to be action! The longer the wait, the more untenable the situation will become.
4. Don’t be in Denial
All of the tools and advice that one needs to fight foreclosure, are all laid to waste and thwarted by one thing – denial. When the bills are piling up and red envelopes are coming in the mail, too many homeowners look the other way. Whether the issue is that resolutions seems unattainable or life getting in the way, not knowing or acknowledging your own situation is the quickest way to worsen it.
Now that we understand the components that determine how to approach a foreclosure, the next step is to implement actionable steps. As we discuss the ten things you can do to stop foreclosure NOW, it should be much easier to determine which foreclosure solution is best for you.
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