Picking up the telephone can stop Forclosure

Foreclosure" is the legal process by which a bank repossesses a home from a borrower and, according to RealtyTrac, 1 out of every 100 homes were in some stage of the foreclosure process in 2007.

This figure is astounding because foreclosure is expensive to both homeowners and banks. Both parties have an interest in avoiding foreclosure but the process has to start with the homeowner -- banks are just too big to start it themselves.

Every mortgage statement has a 1-800 phone number on it. If you're about to fall behind on your mortgage payments, make a phone call first. When you call the toll-free number, a customer service representative talk about your repayment options, or help you design a work-out plan to get your mortgage back to current.

Banks know that more than 80 percent of all foreclosures result from one of the following:

Job loss/reduction in salary
Medical issues
Divorce
Death

These are life events that draw compassion from banks. They understand that bad things can happen to people.

However, the other 20 percent of foreclosures are the result of an inability to sell, an unwillingness to pay, and budget mismanagement. These reasons are not as acceptable to the banks.

But when a homeowner fails to forewarn his lender of a missed payment, the lender assumes the worst. It puts the homeowner in the 20 percent category. This makes a work-out plan much less likely and can quickly lead to foreclosure and a loss of the home.

Lenders want to avoid foreclosure as much as homeowners do. If you're a homeowner and you're facing trouble with your mortgage payment, give your lender a call in advance and try to work it out.

If you never call, you can't possibly get help.

Posted Monday Mar 10

(03/10/08 08:05AM) — Chris Catanese

Great advice...

Communication is the key between borrower and lender. There are so many ways to save a home, yet the lender needs to know what is going on in their borrowers lives so that they can try and help!!

Good stuff and great post

(03/10/08 08:07AM) — Dave Woodson

I agree 100%, i get one or two calls a week with peoplefacing foreclosure, but they have waited too long to call me to do anything about it and then when they call the bank they fall upon deaf ears

(03/10/08 08:19AM) — Orlando & Lake Mary Real Estate Agent, First Time Home Buyers & Luxury Homes

I have a past customer calling me crying stating they cant keep up any more, taxes went up, she lost her job and doesnt make as much money and they now have another unexpected child. She knows we cant sell her house for what she paid for it and would have to come to the table with money they dont really have. She has been hanging on the best she can, she begged me to sell it, but instead I helped her get in touch with the right department with her lender and work out new payments. She loves her house and doesnt want to leave it just cant afford the payments the way they were so with a new schedule she is able to keep her home and work towards making life better. But the key was she hadnt missed payments yet and notified the bank for help before she got to that position.

(03/10/08 08:27AM) — Michael Roberts

Good Advise in these times. Folks need to get over the embarrassment and make the call. No one is absolutely credit perfect unless you are Bill Gates and I bet if you check him in the early days you'd find issues. So help your clinets, customers and or friends with those simple words... Call your lender......

(03/10/08 09:06AM) — Derrick Lewis, ABR, GRI ~ DDR Realty, OCNY

Very good advice. Homeowners, in this situation, should be proactive and communicate with their lenders.

(03/10/08 09:19AM) — Pam Mabe

Christopher - You are right about communicating with the bank, right now the banks don't want the houses back they have too many already.

(03/11/08 12:55AM) — Bill Exeter (1031 Exchange Expert)

We have a number of our recent radio programs focused on short sales and foreclosure related issues. I've posted a summary of the recorded radio programs here: http://activerain.com/blogsview/417028/Short-Sales-and-Foreclosures.

It sounds like you have a lot of experience with short sales on the buyer/investor side? Would you be interested in appearing on our radio program discussing short sale investments?

(03/11/08 11:12AM) — Christopher Hills, CMPS, Massachusetts Mortgages

Bill- i would be interested. give me a call or shoot me an email.