You Don't Have to Lead to
Foreclosure
Contact Tami Winbury Keller Williams Realty for all
your Real Estate needs 805-798-3412 www.ShortsSale.org
There are government reports out informing that most
homeowners who lose their home to foreclosurenever
call the bank to determine whether they can work something out with them,
despite the ubiquitous government, bank and media education campaigns
encouraging them to do just that.
While a number are strategic defaulters who plan to walk
away from the home in any event because of its deep negative equity, the vast
majority are folks who have lost a job, seen their business income decline
during the recession and/or had their payment adjust steeply upward sometime
over the past couple of years, and have simply fallen behind on the
payments.
Simply ignoring the bank's calls and letters does not just
get a distressed homeowner out of a hard conversation or two; the ultimate
results of this plan of inaction include losing the property to foreclosure and
bank repossession, including eviction and having to find another place to live.
Could those things happen anyway, even if you do reach out
to the bank? Absolutely. But there are still millions of homeowners every year
who are able to save their homes, under a bank or governmentloan modification or refinance
program, or even amicably agree to a less traumatic surrender
of the property than foreclosure, by short-selling the property or negotiating a
deed-in-lieu of
foreclosure.
It only makes sense to try.
But not everyone does. Here are a few of the emotions and
psychological underpinnings I suspect motivate a homeowner in mortgage distress
to completely avoid the situation and fail to seek help with keeping their
homes. And just in case you recognize yourself in any of these, I've also
included some steps for deactivating these issues and rethinking your
(non-)approach.
1. Fear and panic. The thought
of not being able to make your mortgage payment -- and then actually missing it
-- induces a constant, chronic state of fear and overwhelming dread. If you have
a contingency plan in place -- a check you know is coming, or a new job where
you'll get your first check in a week or two -- those emotions are manageable.
But if you have no backup plan, or it falls apart, fear quickly comes to panic
-- and panic is paralyzing.
If you're about to miss a mortgage payment or have just
missed one, and are feeling that paralyzing panic of not knowing what to do
next, decide to do just one thing today -- right now -- to break the hold of
that panic. First things first: Search the Web to get educated about the
foreclosure process in your state.
On average, it takes 22 months of missed payments before
banks foreclose on a home, on today's market. That's not to say you should plan
on missing that many, because many states allow foreclosure after six months,
and even a single missed month can be difficult to ever recover from.
But it should also help you understand that you'll
probably not be evicted tomorrow, and you probably do have some time to try to
work something out, whether with the bank or with your own financial
situation.
Any little item you do will help put the kibosh on your
panic. So, go to your mortgage company's website and figure out who it is you
are supposed to call. Calendar your time to call the bank, or call them right
now. Just do something, no matter how little, but do it now.
2. Guilt and shame. The longer
you've been a responsible homeowner, the more susceptible you are to feeling
guilt and shame at the prospect of needing to reach out and ask someone for
help.
If feelings of guilt for making a bad mortgage choice five
years ago or shame at having lost your ability to support your family and make
the mortgage payments are holding you back from making the call, get over it.
Guilt and shame are the lowest-energy, least productive of all the human
emotions.
And the fact is, you certainly are not alone in having
chosen an unsustainable mortgage or having lost your job. The guilt and shame
you feel now, if this describes you, are nothing compared to what you will feel
if you lose your home without having given the effort to save it your best
college try.
3. Intimidation. Perhaps things
would be different if this was unfolding back in the days of the friendly
neighborhood banker. These days, homeowners read headline after headline about
the banks having foreclosed on the wrong people, flat out refused to help
hundreds of thousands of homeowners who were targeted by the government housing
programs, and running loan modification applicants through an insane rigmarole
of lost documents and required resubmissions and last-minute notices that the
home is on the auction block.
I have personally known people so intimidated and
overwhelmed at the thought of even taking on this David vs. Goliath-style battle
that they just pack their bags and move out as soon as they know they're going
to miss a payment.
If this describes you, consider getting some help in
dealing with the banks. There is a lot of free help around.
Visit NACA.com and learn about their extremely successful,
nearly free HomeSave program.
If you live in one of the "Hardest Hit" states or D.C., contact your
state's housing finance agency, which can directly assist you with designated
"Hardest Hit" funds, and has particularly unique and powerful options for those
receiving unemployment insurance or who are back at work but struggling to get
caught up on their mortgage payments.
Additionally, many HUD-approved credit counseling services
will negotiate with your lender on your behalf in a delinquent mortgage
situation, for very low or no cost.
Contact Tami Winbury Keller Williams Realty for all your
Real Estate needs 805-798-3412 www.ShortsSale.org DRE# 01878369
Tara-Nicholle Nelson
