Preventing Foreclosure and Short Sales
There are few things more devastating to a family or any person than losing their home. Home ownership is a big part of the American Dream. To lose a home through foreclosure is also embarrassing and demeaning to those who go through it.
My hope is to give you information that may help prevent this from happening not only to you, but to those that you care about as well. I want to make Foreclosure prevention a core component of what I do as a REALTOR. Please contact me if you have questions and need answers.
EARLY WARNING SIGNS OF FORECLOSURE
- Credit card debt out of control(Maxed out cards),Paying the minimum amount due.
- Paying for necessities with credit cards (groceries, utilities, etc.)
- Cannot meet monthly financial obligations (choosing which bills to pay).
- Borrowing from friends and family.
- Loss of employment, or reduction in hours or wages.
- Major illness which can cause loss of work and an increase in health expenses.
- Divorce, separation or other traumatic family or personal situations.
- Cannot pay the new Adjusted Payment on the ARM mortgage loan.
- Major unbudgeted maintenance expense.
Excessive debt is the number-one cause of financial collapse and foreclosure.
DEBT TO INCOME RATIO
A comparison or ratio of gross income to housing and non-housing expenses; With the FHA, the monthly mortgage payment should be no more than 29% of monthly gross income (before taxes) and the mortgage payment combined with non housing debts should not exceed 41% of income. Read more at www.hud.gov
STRATEGIES TO AVOID FORECLOSURE
- Be proactive about the problem when the first warning signs appear. Not only does this reduce the stress of not knowing what is going to happen but it makes it easier for creditors to work out a plan.
- Contact your lender when you become aware that you have a problem. The last thing that lender wants is to foreclose on the property. finanacial institutions lose a significant amount of money by foreclosing on a property. Foreclosure is a lose/lose for the lender and the homeowner. It is important to be honest and forthright with your discussions and be prepared to discuss the reaosn for your problems.
- Read the mail. Not knowing does not solve the problem, it just delays the final result and increases the pain. By not reading the mail a person avoids the opportunity to get help before it is too late.
- Contact a HUD approved housing counselor or call me for advice. You can call 1-800-569-4287 to find a nearby counselor, or go to www.hud.gov
- Prioritize your spending b y paying for the necessities of life first. Always pay the house payment and health insurance first.
- Look for ways to generate cash. Sell those items that have value but are not used or needed, or seek a part time job to get through the crisis. Not only does this reduce the emotional and financial stress but it provides evidence to the lender that the borrower is proactiviely seeking a way to remedy a bad situation.
- Don't get scammed by a private "foreclosure prevention specialist". Instead go to www.hud.gov to obtain valid information about foreclosure prevention.
- Make an appointment with me to to discuss the problem and get more advice. I am here to serve you.
