Early Intervention Can Prevent Foreclosure

Few people move into a new home with plans of defaulting on their mortgage. As they say in the movies, "life happens when you're making other plans." Many who took on a mortgage with the best of intentions now find themselves in trouble when their loan terms change or when their personal income picture changes due to job loss, divorce, or illness. They are late on a payment, or miss one or two, and then find themselves on the receiving end of phone calls from the lender threatening foreclosure. As we have said here before, foreclosure does not have to be the end of the story. What steps, then, can a person take who wants to keep his home after falling behind?

It's human nature to ignore problems in hopes they'll go away or work themselves out, but in the absence of a financial windfall, mortgage delinquency will not disappear. Late payments will show on a person's credit record even after the account is caught up. The best first step to preventing foreclosure is to seek help early, which is plentiful these days.

• Lenders are more willing to work with borrowers these days, so calling the lender directly is one option. Lenders do not really want the property back so they might be willing to help you.
• The Colorado Foreclosure Hotline is set up to counsel delinquent mortgage holders. The housing counselors there can suggest a plan of action.
• A real estate agent like myself with expertise in handling distressed property situations can also work with the homeowner to find alternative solutions to foreclosure in Denver.

Many foreclosures occur because people wait too long to check out their options. While mortgage payments are usually due monthly, the lender will usually just add fees and make calls for three months before starting the foreclosure process. By this time, thousands of dollars could be due. As soon as a homeowner knows he's headed for trouble is a good time to make the call.

As an unfortunate byproduct of the foreclosure crisis, many for-profit companies have sprung up to take advantage of scared and worried homeowners. Scams abound in this area, but so does free advice. The Foreclosure Hotline is non-profit, the lender will work with the debtor to prevent further loss, and a CDPE-certified professional like myself does not benefit from counseling.

Foreclosure has a long-term impact on a person's credit record. Not only do people have to declare a foreclosure on job applications and credit applications for cars, apartments, and mortgages, but their credit scores are hit with a loss of 300 or more points, which may be an obstacle to their obtaining credit or a future mortgage at reasonable rates. Taking swift action is the best way to prevent or minimize damage and salvage not only the home but one's financial future as well.

For a confidential discussion about alternatives to foreclosure in Denver, contact your Denver CDPE advocate today to discuss your options. I'm here to help!

Marianne Bandy

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