Foreclosure Avoidance: Steps To Help You Avoid Foreclosure

Are you experiencing a financial crisis that has you worried that you may lose your home to foreclosure? If so, here are some practical steps you can take in your attempts at foreclosure avoidance.

Step 1 – Make An Action Plan

First and foremost, sit down and come up with a possible plan of action if you are really intent on avoiding foreclosure. This is important because it will help you to take action. Financial problems often cause those that are affected to be paralyzed into taking no action.

Taking no action is certainly not going to solve the problem. Your plan of action should include ways of increasing income and decreasing the amount spent. The next few steps discuss some possible ideas that you may want to include in your plan.

Step 2 – Eliminate Unneeded Purchases

Do this before you receive a letter of intent to foreclose and you may even be able to have some extra money ready to apply toward past or current mortgage payments. It's not as difficult as you may think.

Pack a bag lunch instead of eating out. Pass up coffee at the drive-through and use a thermos to keep the coffee you brew at home, hot. Lower your thermostat in winter and raise it in summer to save on energy costs. Can you get rid of a costly internet or cable package? Even picking up a pizza on the way home is cheaper than delivery.

There are many semi-painless ways to spend less.

Step 3 – Get A Second or Part-time Job

Eliminating unnecessary purchases will only go so far, especially if you are already pretty frugal. If you are truly serious about keeping your home, you may need to take on a second job. Even in our poor economic climate, there are still lots of jobs, low paying certainly, but jobs that are available.

Step 4 – Sell Assets

Maybe you are unable to work an extra job for one reason or another. Perhaps you need a lump sum quickly to avoid foreclosure. The quickest way to raise some fast cash might be to sell off some of your assets. If you have a second car, can you get by with one vehicle at least until you get back on your feet? Do you own musical equipment or tools that are valuable enough to raise some extra money? How about holding a major yard sale?

Step 5 – Set Up An Appointment With Your Mortgage Holder

If you know that you are having difficulty meeting your financial commitments or if you you've already received foreclosure warning letters, make an appointment with your lender immediately. Often mortgage holders are as anxious to avoid foreclosure as you are because they generally stand to lose money when property is foreclosed.

At the meeting talk about the plan of action that you have put in place. As proof of your intent, bring any additional money that you've generated, as well as pay stubs from your second job.

If you can show that you are working hard to make things right, there's a good chance that your lender will be willing to work with you to resolve the problem. They may allow you to rework your loan and make more affordable monthly payments, or they may give you more time to pay back past-due amounts.

Step 6 – Consider A Pre-Foreclosure Sale

If your mortgage holder is unable or unwilling to help, or you just won't be able to meet your financial commitments, don't just wait for the foreclosure to happen. Try to sell your home yourself before it's taken over by your lender. This way, although you still lose your home, you will hopefully be able to pay off the mortgage and leave your credit rating intact. If you're lucky you may even make a profit.

By following these practical steps, foreclosure avoidance is very possible. Consult a lawyer or a HUD approved housing counselor to see what you can do to avoid or stop foreclosure from happening.