3 Mistakes Homeowners Make during Foreclosure

When a homeowner is facing foreclosure they often have no idea what to do. The process of foreclosure is a stressful one and can overwhelm anyone. Here are a few common mistakes that people make when facing a foreclosure. 

1. Give Up

One common mistake that many homeowners make when they are facing foreclosure is simply give up. While going into default is a very serious situation, it is not the final step in the process. It is not too late to save your home if you want to save it. Many people reach the foreclosure stage and then somehow figure out a way to avoid foreclosure. Do not think that just because the bank sends you a statement telling you that you are in default that you cannot do anything about it. 

The paperwork that you receive from the bank will often tell you that the entire amount of the loan is now due. Otherwise, your home will be foreclosed upon. However, this is not entirely true. Many times, if you call the lender, you can work out a reasonable solution for both parties. They want to keep you in your house so that they can keep receiving a payment. You want to stay in your house for obvious reasons. If you can work out a resolution that helps both parties, it can be very beneficial. You get a payment that you can afford and they keep receiving it. 

2. Hiring a Questionable Company

There is an entire industry out there that preys on people that are going through foreclosure. These unscrupulous companies make a living out of coming in and making false promises about what they can do for you. They might guarantee that they can help you keep your house and come out without a scratch on your credit. While there are some companies that can help you during a foreclosure, you should be aware of working with unethical companies. 

If anyone asks you for a large upfront fee in order to help you save your home, avoid them. The companies that do this are usually scam artists. Many times, not only do they not help you, they do nothing at all in return for the money. You might never hear from them again. 

3. Prepare for the Future

Many people facing foreclosure just freeze up and do not plan ahead for anything. Regardless of what you decide to do, you need to make a plan and stick with it. If you are going to stay and fight, get the help that you need and get started. If you are going to leave, make arrangements for alternative living arrangements.