How To Avoid Foreclosure By Using Credit Counseling
If you are about to become past due on your home
mortgage and are simply planning ignoring warning letters from your lender you
will be following the wrong course.
Instead you should contact your mortgage company's hotline for customers
delinquent on their loans. Most major companies have special numbers set up and
staff that specialize in helping negotiate a solution.
The lenders now own much more real estate than they can resell so it is in their
best interest to keep you in your home.
Many lenders will allow you to apply for new fixed rate, low interest financing
if you have a subprime mortgage and have remained current. This is part of the
government plan to help keep homeowners in their homes.
One tool that they may employ to help you is called forbearance. This has been
used in the past for victims of hurricane disasters, etc, to suspend loan
payments and interest for a specified period of time until the borrower can get
on his feet.
Consider A Repayment Plan
Another tool is a repayment plan whereby you pay back your past due balance over
the next few months until you are caught up.
These are just some of the tools that banks may be able to use to help you catch
There are others that you can do on your own to get your financial house on
order so that you can have enough to repay your loan.
If you are just a couple hundred short of having enough you might consider
taking on a roommate to make up the difference. Start selling recreational toys
like RV's, boats, jet skis, etc if you are even in the slightest danger of
getting behind on your loan. Your home should come first.
Cut back on your utility bills by raising (summer) or lowering your thermostat,
using a programmable thermostat.
Set up a budget for entertainment, etc and try to stick to it with the goal of
saving enough for the amount you need to make your mortgage payment. Change your
shopping habits and buy at discount stores.
Volunteer Credit Counseling Organizations
If you have a large amount of credit card debt that is preventing you from
being able to make your mortgage payment consider a consolidation loan or
negotiating with credit card companies through an agency such as Consumer Credit
Counseling. There are volunteer credit counseling organizations that help
homeowners avoid foreclosure. Volunteer credit counseling agencies do not
charge any fees and can often negotiate a better deal for customers since they
are not affiliated with creditors, as some consumer credit counseling agencies
Search your local yellow pages for volunteer
credit counseling organizations. Often these are sponsored by local churches and
It is possible to avoid foreclosure in most cases but you have to start early,
before you get behind.