Fighting Foreclosure | Alberta Buyers
There’s a new F-word these days, and it isn’t the one you’re thinking of. “Foreclosure” is the term those of us struggling to hold onto homes hate to hear. The worst-case scenario many people envision when they consider the effects of the current recession on their lives. You’ve heard the horror stories: a major hit to your credit score (usually somewhere in the neighborhood of 200-300 points), and a 7-year impact on your credit report.
Important Steps to Avoid Foreclosure at All Costs
Let’s start by talking over a few ways to avoid having this happen to you. We already wrote a bit about short sales, and their effect on your rating. Here are some other ways you can try to keep the possibility of foreclosure from becoming a reality. The first and most basic is to keep in touch with your lender. No one likes hearing bad news, and it can be easier to let unopened bills and late notices pile up in your trash than deal with the reality of your situation. If you find yourself falling behind on your payments, contact your lender and discuss the possibility of modifying your loan (and negotiating one with a lower interest rate, for example). Occasionally, you can ask for forbearance, a period during which the lender agrees to let you temporarily stop making payments until you have your situation sorted out. Suppose you decide instead to move, most likely into a more affordable home or a rented apartment. In the event that the amount of your mortgage exceeds the value of the house, consider a short sale. Sometimes, you can simply turn your home over to the lender and cancel your remaining debt (a process called a “deed in lieu of foreclosure”), but like all of your other options if you’re at this critical stage, think it over carefully.
Whatever You Do, Act Now—Your Situation Won’t Fix Itself
Whatever your situation or plan for the future, we wish you the best of luck, and are always here to take any and all questions you may have.