Failure to pay your monthly mortgage payments can lead to foreclosure, but there are ways to avoid that outcome. Here are some tips to avoid foreclosure:
1. Get in touch with your lender. Do not ignore the letters from your lender. If you are having problems making your payments, call or write to your lender's Loss Mitigation Department without delay. Explain your financial situation. Make sure that you prepare the supporting documents to prove that you are having difficulties in making payments i.e. monthly income and expenses. Without the said information, they may not be able to help.
2. Ask your lender if there are some ways you can work out a compromise regarding payments until you recover from your financial difficulty.
3. Contact a Housing and Urban Development or HUD-approved House Counseling Agency. These agencies are available to provide you with the information and assistance you need to avoid foreclosure. You may be eligible for a special Making Home Affordable loan modification or refinance to reduce your monthly payments and help you keep your home. Foreclosure prevention counseling services are free of charge by non-profit housing counseling agencies in partnership with the Federal Government.
4. Make plans to remedy the situation, either get a second job to have additional income or put your home for sale.
Having a Notice of Default filed against you will show up on your credit report as late payments. This will greatly negatively affect your credit score so please make sure to avoid late payments as possible.
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