Foreclosure: How and Why You Should Talk to Your Bank

Are you homeowner who is facing foreclosure?  If you are, your first thought may be to start packing.  Yes, this is the only choice for some in foreclosure, but that doesn’t mean it is yours.  Before you throw in the towel, make an appointment in person to speak with your financial lender.  You may be surprised how much help, assistance, or advice you may receive when doing so.

First and foremost, it is important to know that banks and other financial lenders are not evil.  It may sound silly, but this is how many homeowners feel when facing foreclosure.  Many want to know how another human being can force them to leave their own home.  In the heat of the moment, many do not realize that banks want to avoid foreclosures just as much as homeowners do.  Financial lenders often lose money on foreclosure properties.  That is why it is imperative that you schedule an in person meeting with your lender.

As nice as it is to know that you should meet with your financial lender when you feel that you are facing foreclosure or know for sure that it is looming, you may be unsure how to proceed.  For starters, many homeowners want to know when the discussion should start.  In all honesty, it should start as soon as you know that you will miss a mortgage payment.  It is best not to wait until the foreclosure process starts.  If you can make payment, but need to do so a few weeks late, be sure to make your actions known.  This will prevent your lender from even considering foreclosure right away.

One of the many reasons why homeowners are facing foreclosure is because of the job market.  Long-term employees are now finding themselves standing in the unemployment line.  If you are laid off from your job, schedule a meeting with your mortgage holder immediately.  They may be walling to work with you, provided you will be taking proactive steps to find a new job.  Often times, you may find your monthly mortgages payments temporarily reduced.

When your home enters into foreclosure, you will see signs posted on the building.  With that said, this is not the first notice that you will receive.  As a reminder, banks want to avoid foreclosure just as much as you do.  That is why they will likely call and send regular notices to your home.  As embarrassing as it may be to admit that you cannot make your mortgage payments, it is important to answer the phone.  Remember, your bank may be willing to work with you and create a temporary payment plan.  This is often the case when you can prove your financial hardships are only temporary.  For example, are you temporarily unable to work due to an injury?  Were you laid off, but looking for a new job? If so, make it known.

It is also important to determine how much you need to pay to stop the foreclosure proceedings in their tracks.  Since banks want to avoid foreclosure, they may accept a portion of the money that you owe.  With that said, this is where you need to proceed with caution.  If the bank requires full payment the following month, make sure you can make that payment in full.  If not, the process will simply just restart from the beginning all over again.

When discussing your options with your bank, it is important to do so in person.  You will want to show your lender that you intend to get back on track financially, but this is difficult to prove over the phone.  Walk into the bank with your head held high, dress professional, and be very confident.  You need to prove to your lender that the words coming out of your mouth are true.  Just because you say you are looking for a new job, it doesn’t mean that you are.