Foreclosures in the United States are at a historic low, but that’s not good news. The government issued a moratorium on foreclosures at the start of pandemic lockdowns as layoffs and furloughs spiked.
Governments subsequently renewed the moratorium, but these measures have expired or are set to in the near future, depending on which state you live in.
Many homeowners may see a foreclosure notice in their mailboxes soon as the number of people 90 days or more behind in their mortgage payments has doubled year over year.
So what should you do if you have received a house foreclosure notice?
In the following article, we’ll supply you with some tips on what to do after getting gone of these notices.
Foreclosure Notice? Don’t Panic
Once you get the notice, take a deep breath and get some housing advice. There are several free legal services out there for homeowners, but in many cases, you can’t access them until you’ve received the notice.
Now is the time to remain calm and make the call to the housing resources usually supplied for free in your state. (For an example, there’s more information here).
These services are out there because people being forced from their homes causes stress upon government services and families, and it’s better to keep people in their homes rather than have them double up or try to find housing elsewhere.
These services will inform you of your rights and what you can do where you live. The Consumer Guide to Mortgage Refinancing developed by the Federal Reserve is a good place to start your research.
Catch Up or Modify
Once you’ve researched your legal situation and the terms of your loan, see if you can catch up on the payments. If you don’t have the money available to you from liquidating assets or borrowing the money from elsewhere, state resources may be out there to augment what you can come up with.
Many municipalities have funds available to help people who have come up short on their mortgage payments.
Also, reach out to your mortgage holder and inquire if they have any ability to modify the scope of your loan. This is especially true if you have recently returned to the workforce or have had a job change.
In many cases, lenders have programs for delinquent homeowners to get back on track with their payments, but you may need to submit several forms and supplemental financial documentation.
Short Sale Option
The short sale is used when the house is worth enough money to pay off the remainder of the mortgage. Usually, this isn’t an option because the house usually has depreciated.
However, real estate prices across the country have spiked. As a result, you may be able to arrange a short sale (or a sale that happened before the bank can foreclose), pay off your mortgage, and even walk away with some of the equity you put into your home.
A short sale will also help salvage your credit. Sadly, you lose your home instead of staying put, which is usually preferable to most homeowners.
Do You Need Help?
If you are dealing with a potential foreclosure notice, you are not alone. Unfortunately, even the best-intended people come under financial and housing stress.
As stated above, do your best to stay calm and research the situation. Also, don’t be afraid to reach out to talk to people at the local level to get the most out of resources near you.
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