Skip to content

5 things to do immediately when facing foreclosure

With the nation still reeling in the wake of a near collapse financially, many Americans are still having to face harsh realities in their personal finances. If you’re one of those that has been scared to death and almost paralyzed by your mortgage company, you’re probably feeling like you’re stuck between a rock and a hard place with nowhere to turn. Before you hit the panic button and give up on your house, take a look at our list of steps that you should take right now.

1. Sit down with you spouse and/or family and come up with a tentative plan. This plan should take all of your assets and debts into consideration, putting them on paper in front of you so that you have a clear picture of where you stand.
2. Study your mortgage documentation. Before you can pursue any course of action (including abandoning ship) you need to know exactly what your rights and responsibilities are. Read in conjunction with your local laws, these documents will tell you what types of outs you have, and what other options you might have besides just walking away.
3. Contact a counselor that handles foreclosure avoidance. There are organizations that can walk you through all of the laws and possible alternatives that you might have in your state.
4. Get your lender on the phone. Don’t just assume that all is lost; there may be something that you can work out with your lender. For example: some lenders have fresh-start programs or loan modifications that will simply extend your loan out a few additional months – making you current right now.
5. Seek out the available government programs. It might take some time and effort to locate the right program for your situation, but there are alternatives. One possibility is if your mortgage is actually owned by Fannie Mae or Freddie Mac — you might have the opportunity to rent your home before foreclosure.