When you’re facing foreclosure, you feel desperate. More than likely, you’re looking for help to get out of your current situation, but are unsure where to turn. It can be difficult to know which programs and companies are out to help you, and which are only out to take more of your hard earned money than you can spare.

In general, it’s wise to avoid most foreclosure prevention companies. You can probably do the paperwork yourself and save time, money, and hassle. These companies often charge you several thousand dollars to negotiate with your lender and complete necessary paperwork. If you’re feeling overwhelmed by the amount of paperwork required, ask your lender if financial counseling is available. They may offer this service free of charge – many lending institutions do.

Beware of common foreclosure scams, as well. One scam that’s becoming more popular is for an agency to offer help preventing foreclosure. However, the paperwork that you sign actually gives them the deed to your home upon completion of the program, essentially making you a renter in your own property. Before you sign any papers related to your mortgage or the foreclosure process, it may be wise to consult a housing counselor or an attorney. He or she will be able to advise you and help keep you from making a costly mistake.

Depending on your financial situation, you may be able to take advantage of government financial counseling, as well. HUD offers free financial counseling for mortgage holders who meet specific requirements, and may be able to help you negotiate with your lender to stay in your home. Check with your lender to find out how to apply for this program – you may even qualify for a loan modification or other government assistance.

When facing foreclosure, it’s important to keep in mind that the bank isn’t out to get you. They likely want to offer help preventing a foreclosure -all you have to do is ask. Foreclosures are extremely expensive for banks, and they like to avoid them whenever possible. If working with you to set up financial counselor or a loan modification agreement keeps you from defaulting on your mortgage, your bank will likely be more than happy to work with you. Take the time to communicate with your lender regularly and explain the financial hardship you find yourself in – you may be surprised at how willing they are to work with you.

Filed under: Understanding The Foreclosure Process

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