Four Things You Need To Know About Avoiding Foreclosure

January 8th, 2010 by Reed Allmand

1. Many homeowners misunderstand foreclosure. They believe that foreclosure begins when the bank decides to send out a notice and begin the process of auctioning off their home. But in reality, the foreclosure process begins at your first missed payment.  When you miss your mortgage payment you are already on the road to foreclosure and that is when you need to act to avoid it.
2. Foreclosure does not need to be inevitable.  Many homeowners who are seriously delinquent on their mortgage payments often give up hope because they cannot see how they can climb out of the financial mess they are in.  However, even if a homeowner is three or more months behind on their mortgage they may still be able to avoid foreclosure and make their mortgage current. But it is important that homeowners get good advice from trusted sources such as a bankruptcy attorney, their mortgage lender or even the www.makinghomeaffordable.gov website.
3. Bankruptcy can help a homeowners avoid foreclosure. Chapter 13 bankruptcy will allow the debtor to repay their delinquent mortgage payments and other debts over the course of three to five years.  Chapter 7 bankruptcy can discharge unsecured debts and free up more income for the debtor’s mortgage payments.
4. There are many foreclosure scammers who prey on desperate and uninformed homeowners facing foreclosure.  Want to avoid scams? Then follow this cliché; but true warning: “If it’s sounds too good to be true, it probably is.” Many scammers “guarantee” that they can stop foreclosure. They are not telling the truth. Only bankruptcy is guaranteed to stop foreclosure through the automatic stay.  Also, watch out for scammers who ask for a fee or ask you to make mortgage payments to them not your lender. This past year has been quite busy for these scammers, so don’t be their next victim.

About Reed Allmand

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Allmand's vision is rooted in his own financially precarious childhood in Abilene "My father always had difficulty holding a job and supporting our family, so after my parents divorced when I was 12, my sister and I got jobs to help make ends meet," he recalls. "I remember what it felt like as a child to worry that our car would be repossessed or home foreclosed on."

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