Foreclosure is a terrifying possibility for some homeowners, so it’s best to prevent foreclosure altogether.
It’s easy to fall behind on payments, especially in the current economic climate, where the uncertainty surrounding the workforce has caused unemployment and foreclosures to rise. If your home is in jeopardy and you want to prevent losing it, you need to know exactly what to do and what to expect.
We’ve worked with many Texans to find solutions for a housing situation that is no longer working for them. Today, we’re sharing what you need to know to save your home and credit if you’re facing foreclosure—including ways we can help.
The very first thing you need to do is to gather every piece of information that relates to your homeownership, mortgage, credit, and current financial situation. Start requesting documentation regarding your income from all sources, including social security, alimony, etc. You’ll also need an exhaustive list of everything you currently pay for, from bills to entertainment subscriptions. Consider combing through and categorizing your expenses from the last three months for a snapshot.
You’ll want the following:
- Mortgage or deed of trust
- Monthly mortgage statement
- A comprehensive record of previous mortgage payments
- Property tax information
- Home insurance information
- Escrow statements
- Pay stubs
- Tax returns
- Documentation of additional income (social security, disability, alimony, etc.)
- Bills of all monthly expenses
Once you have all of your information at your fingertips you should be ready to start researching all of your options. Take a deep dive into your mortgage documentation to see what it says about missing payments and if reinstatement of the loan is possible—some allow reinstatement if payments are caught up.
Look up the legal protections and requirements for foreclosure in your state. Federal law usually prevents any action until there have been missed payments for 120 days, and there are even exceptions for the coronavirus disaster.
Read about your options, such as a loan modification, forbearance agreement, short sale, or returning the home to the lender.
Here are the steps you can and should take to mitigate a total loss:
- Budget: The very first thing you should do as a homeowner facing future foreclosure is to carefully inspect and alter your budget. Cutting some optional expenses could help you make 1-2 more months of payments while you work out your financial situation.
- Work with Servicer: Next, call your loan servicer as soon as you’re facing a missed or late payment. Often they can work with you on modifications to your loan or forbearance for special, temporary circumstances.
- Call a HUD Counselor: There are free counselors that can help with advising or connecting you to programs that exist to help you keep your home.
- Get a Lawyer: A local foreclosure lawyer can help you navigate the road of foreclosure to protect your rights and save your finances.
- Sell Your Home: If you have equity in your home, you can sell it to pay off the mortgage and avoid the devastating financial consequences of foreclosure.
- Short Sale or Return: In the event that you’re upside down in your home (meaning you owe more than it’s worth), you can often sell the home and work out payments for the remaining balance.
Texas Sell Now is Here for You
If you’re a resident of Dallas or Fort Worth, Texas, or the surrounding area, don’t wait until it’s too late. Let Texas Sell Now help you prevent foreclosure by selling your home now.