Posts for category ‘Loan modification’

I have clients who have been in their homes for over two years without paying their mortgage and the lender hasn’t even filed a NOD (notice of default) the first step in the foreclosure process. These clients are working with their lender to try to save their home. In the meantime they are banking all the funds they can while living rent free so that if they don’t save their home they will have the financial means to get on with their lives. Even if you think that you can’t afford to save your home you should at least go through the action plans I will present later on. Let your lender make the final determination. Work with them and give yourself the luxury of time and money. Those two commodities are vital to everyone in your position.

The political landscape is changing on a weekly basis. The available options to homeowners in distress are only expanding. The longer you can delay the foreclosure process the more options will be available to you. Options that don’t even exist today may appear that you will be able to take advantage of. Remember that the banks don’t want foreclosure any more than you do. They know that foreclosure is the worst option for them too. They want to work with you. They want to save your home if at all possible. They would rather do a loan modification or a short sale if at all possible. It may not seem that way when you are going through the often frustrating and infuriating process of negotiating with your lender but trust me they want to work with you.

But what will the neighbors think? Don’t worry about what the neighbors think. As an old saying goes, “It’s none of your business what others think about you” or “If you are worried about what others think about you, don’t. Others are too busy thinking about themselves to think about you”. I have a client who is going through foreclosure and he was embarrassed because he lives in Blackhawk, an upscale development. He didn’t want the neighbors to think he was some kind of deadbeat. I printed out a lengthy list of homes in his area that were further along in the foreclosure process than he was. He was shocked. Like most people he did not fully realize the magnitude of the housing crisis. If you find yourself owing more on your home than it is currently worth and/or are having trouble making your payments you are in good company. I guarantee that many of your neighbors are in the same boat as you are. No one will think badly about you because you find yourself in this situation. Most people know that but for the grace of God they too would be in similar circumstances.

I know that you are in a tough situation right now but take a moment to put your overall situation into the proper perspective. Picture yourself a few years in the future. You worked hard to save your home. Maybe you were successful. Maybe you were able to do a short sale. Maybe you lost your home to foreclosure. No matter what happened in the end you took control of the situation. You bought yourself time and made the best of a bad situation. The foreclosure is now just a fading distant memory. You’ve picked up the pieces and are now living your life. Remember what Mark Twain once said “I have been through some terrible things in my life, some of which actually happened”. Please remember that this too shall pass.

This previous story about Drunk Jim illustrates the worst thing that can happen if you do absolutely nothing to help yourself. The only thing the bank can do to you is evict you from your home and place a negative report on your credit. That’s it. That’s the worst of it. Hell they can’t even evict you as long as you leave before the sheriff shows up. As the title of this chapter says, the bank can’t shoot your dog. The fear of the unknown is what paralyzes most people. People tend to make a bad situation worse in their imagination. The fear of foreclosure is usually worse than the actual event. I have worked with many clients who have told me that they actually felt relief when the foreclosure was complete. They report to me that the foreclosure was actually a fresh new beginning for them, not a tragic end.

Let me paint a different worst case ending for you. In your case the absolute worst thing that will happen is you will fight to keep your house. You will try to modify your loan, get a forbearance, a reinstatement, file bankruptcy, do a short sale, whatever is most appropriate for your situation. You’ll follow my techniques to exercise all of your options. If none of these attempts pan out you will lose your home to foreclosure. But you are smarter than Drunk Jim. You will start talking to your lender as early in the process as possible and sort through and try all of your options. You will buy the most valuable commodity: time.

The worst thing that will happen to you is you will live in your home rent free for a period of time, you will save your money, identify how you got into this financial mess and take steps to prevent it from happening again. You may lose your home to foreclosure but you’ll exercise all your options even then. You may decide to take the cash for keys offer from the bank or you may decide to stay in the house right up to the eviction. As long as you move out at least a day before the sheriff shows up you will avoid the fate of Drunk Jim. The important thing is to take control TODAY and delay the process. Your options will dwindle as time passes.