Ridiculously Easy Step By Step Instructions To Avoiding Foreclosure

By Author: Nick Adama
Total Articles: 197
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If you are a borrower who is wishing to avoid foreclosure, then you have to save this guide. Foreclosure happens when multiple payments are missed on a home loan. Most of the time, after missing 3 or more payments, your servicer will implement the foreclosure process. Once the the foreclosure process has begun, you will only have 3-6 months to stop a sheriff's/trustee sale. This is when the home is sold at auction to the highest bidder.

This instructional information was created to help the average person facing foreclosure save their home, without any special skills and without hiring a professional negotiator to help.

Unfortunately, they don't allow us to write enough here to give you complete guide, so I am making this the "lite" version. If you want the entire guide, you can download it for free from my website or by visiting my profile on this site!

To keep things simple, I've labeled each step of the process, 1 - 10. A ten step process seems logical enough and most people can finish ten steps, without needing too much assistance.

This article is not meant for people who can afford to hire ...
... a professional. In every situation, we suggest using an expert if at all possible. Using a professional will not only increase your chances of saving your home, but it can save you $100,000's over the life of the loan. The difference between a good modification and a bad modification can cost the foreclosure victim over $1000 every month! If you can afford to hire an expert, always do it! This should be used for people who do not have the funds to hire an expert and need to take action themselves, rather than forfeiting their house.

Ok, here is what you've been waiting for!

Step #1 - determine what stage of foreclosure you are in and how much time you have until the auction.

This can be accomplished by either communicating with your servicer or the county court that is hearing the foreclosure process. Alternatively, on our website, you can find a foreclosure time line for each individual state. This should help you understand how much time you have to prohibit the foreclosure.

Step #2 - Immediately lower your expenses.

Steps 1 and 2 should happen right away, as soon as you know you're going to fall behind. You need to immediately drop every single unnecessary expense from your budget. No more cable tv, i-tunes, dvd rentals, etc... Every single expense while you are facing foreclosure should be a life or death necessity. Most families have over $500 a month in excess spending that is unnecessary. Your only necessities should be food, shelter, utilities, and those expenses required to keep your job(s).

Step #3 - Raise and earn as much money as possible.

When you're behind on payments, you not only need to forget extra expenses, but you need to start hording and earning as much money as possible. Use craigslist, ebay, and your local newspaper to sell off unwanted items, such as extra furniture, cars, collectables, guns, and other extra household items you can live without. You should also be trying to stay extra hours at work. Looking for a second job or odd jobs is also a good idea, so you can earn more money.

Step #4 - Attend every court case to dispute the foreclosure and ask for more time.

If you are in a judicial state, your case will be heard in front of the court. You should be disputing the foreclosure and requesting additional time to prepare for your case. There are many legal defenses that you can use to fight foreclosure on your own, but simply requesting more time each time your case goes to court (with a legitimate reason) will prolong the foreclosure process. This will give you extra time to save cash and negotiate with your bank. Go to my profile and look at other articles to learn about these legal defenses. If you are in a non judicial state, you should be asking for this extra time or extension with your lender, rather than the court.

Step #5 - Contact your serviser on a regular basis.

Staying in contact with your lender is crucial to avoiding foreclosure. Keep very careful notes on every conversation and ask for the full name and employee number for every person you communicate with.

Step #6 - Prepare your financial statement showing income and expenses.

The very first thing you will need to provide to your servicer is your income and expense statement. Your servicer has access to your credit report and will ask for your bank statements, so never lie about this data. You will also need to provide the last two months of pay stube and your hardship letter. So get these items ready so you can send everything the same day your servicer asks for them.

Step #7 - Know the market value of your house.

In order to correctly negotiate with your servicer, you'll need to know the fair market value of your house. This value is used to determine how much money will be lost if the servicer decides to continue the foreclosure process. You will need to get a property valuation with comparables, an appraisal, or a Broker Price Opinion (BPO). This portion of the process is imperative when attempting a short sale, workout plan, or mortgage modification.

Step #8 - Ask your lender for a mortgage modification, short sale, or deed in lieu.

This step should be taken very carefully, because if you submit your deal the incorrect way, you could get turned down forever. Before asking your lender for a mortgage modification, you need to review your personal records, property value, and hardship documentation, to verify that you meet the qualifications.

Step #9 - Follow up on everything and get everything in writing.

No matter how meaningless the conversation, or even if you never talk to a single person, you need to keep detailed notes of every time you talk with your servicer. Any agreements that are made over the phone should be immediately confirmed in writing. Fax and email are the best way to quickly get the agreement confirmed in writing.

Step #10 - Don't miss a payment or deadline.

Once your servicer has approved a repayment plan or modification, it's imperative to always pay the payment on time. If you miss a payment, this could eliminate the modification. You also have to make sure you send all paperwork back to your bank the same day you receive it. Fill everything out completely and return it immediately by fax, email, or Federal Express. Follow up any digital/mail communication with a phone call to verify it was received. Also verify all payments are received on time and applied to your account, if you mail them.

Hopefully these steps have been helpful and you now have a better understanding of the foreclosure process. If you require more help, don't be afraid to ask for it. There are several websites like ours that provide tons of free advice and help to people who are facing foreclosure!
Nick publishes articles to give advice to borrowers who are the in the process of facing foreclosure on their homes and learning how to repair their finances afterward. His other articles describe various solutions to foreclosure, including mortgage modification, obtaining a freclosure refinance, and even answering a foreclosure complaint to get more time from the courts to work out a better solution. Visit his site today to read more about how foreclosure works and how you can stop he process while you still have time: http://www.foreclosurefish.net/