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Step 1 - Toward Foreclosure Prevention  
Negotiating with lender to prevent foreclosure

Your first step to preventing foreclosure is to talk to your mortgage lender in a timely manner. Mortgage lenders do not profit from foreclosure situations. They want to work with you and help you find a way to keep your home. Do not wait for your situation to change before contacting your lender. 

If you are two or more months behind in your mortgage payments you may be encouraging the foreclosure process if the lender is not been given the opportunity to negotiate with you. Before contacting your lender take a few minutes to prepare to answer the following issues that will guide both parties thru negotiation process. 

What caused you to fall behind in your payments?
[lay-off notice, a medical expense, large utility bills, etc. It is important to be truthful.] 

What are your current resources?
[monthly income, including all dependable sources such as salary or wage; disability, retirement or welfare benefits; and savings and investments.] 

What are your other debts and expenses?
[Essentials only. Food, utilities, loan or credit payments, insurance, child support and/or alimony.] 

What are your plans?
Your attitude and outlook, will have a strong influence how far the lender will go to help you. Share a written short term repayment plan that consists of a simplified life style as well as additional sources of income where possible. Confirmed working financial assistance already in place may also be shared. 
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Negotiate a Temporary Delay in Payments 
Short term solutions can be worked into the negotiations where the paying party is likely to see an improvement in his or her income situation over time.


Negotiate a Permanent Loan Restructuring
Long term solutions can be worked into the negotiations particularly when the paying party is older and income and other circumstances are less likely to change over time. In this case when considering restructuring the loan payment process both parties do well to consider a permanent agreement. The lender may consider receiving less interest as a better solution than foreclosing on the home. 

In many if not most cases the lender is better off keeping the consumer in the home and receiving lower mortgage payments. Lenders may consider this a more viable option compared to putting the consumer in the position to file bankruptcy. In this case the repayment plan may be inadequate according to the lenders point of view. Following types of negotiation may prove satisfactory to both parties.

Loan Restructuring Options:
Allowing the consumer to repay these delinquent payments slowly over the whole term of the loan; Allowing a reasonable amount of repayment of delinquent amounts, with no interest accrual.

Lowering the interest rate for a certain number of years thus reducing monthly payments while keeping the term of the loan unchanged

Lengthening the term of the loan, thus reducing monthly payments. 

FHA loans are ideal for individuals with credit problems including bankruptcies and foreclosures. While your credit score is usually the most important factor lenders consider when approving you for a conventional loan, with an FHA loan (non-conventional loan) it’s not the central consideration. Connect with FHA lenders who maybe able to help you avoid foreclosure FREE Foreclosure Consultation

Step One - Lender Negotiation Tips

Step Two - Housing Agencies

Step Three - Pre-Foreclosure

Step Four - Post-Foreclosure
 
Step Five - Refinancing Options And Hard Money loans

Step Six - Last Resort - Bankruptcy

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