Many Florida homeowners who were victimized by predatory lending practices or who fell on hard economic times can find themselves on the brink of foreclosure of their homes. That is a very scary and precarious position to be in, especially if they have families.
But no matter how hopeless the situation first appears, there are steps that can be taken to mitigate the damage or stop the foreclosure in its tracks.
The most important thing to do is to contact the lender or loan agent immediately upon realizing that a scheduled payment will not be made. Statistics indicates that half of all consumers who defaulted on their mortgages or missed some payments never reached out to their lender to apprise them of the situation. But keeping the lender out of the loop can backfire on consumers. It is in the lenders’ best interests to help consumers retain their homes, as foreclosures and the resulting legal procedures are costly to them as well.
Be forthcoming with mortgage holders about precarious financial situations. Let them know what the problem is, what caused the problem and how it can be resolved. They may offer options that can be explored to save your property. Some of those may be:
— Repayment plan: This agreement allots consumers a predetermined amount of time to repay the arrearages by adding some of the total amount past due to the monthly note. This can be especially helpful in short-term situations of insolvency, like a job loss. Once work is resumed, the payments will be made.
— Forbearance: Payments can be temporarily suspended or reduced until your financial situation improves. This can be offered alone or in conjunction with another option.
— Reinstatement: Lenders sometimes agree to allow consumers to make a lump sum payment of the arrearages by a certain date. This is useful if the consumer is expecting a windfall such as an end-of-year bonus, tax refund, settlement or other source of revenue.
There are other options available to consumers as well, but to avoid getting scammed by so-called foreclosure recovery companies, contact a Florida attorney who practices bankruptcy and foreclosure law to protect your interests.
Source: Florida Office of the Attorney General, “How to Protect Yourself: Tips for Avoiding Mortgage Foreclosures” Sep. 30, 2014