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Top 10 Tips For Surviving A Foreclosure

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Surviving a foreclosure can be a traumatic experience for a homeowner. You may have to deal with calls from the lenders, damage to your credit report and the loss of your home. By following a few simple steps, however, you can get through the foreclosure process as unscathed as possible. Read on for the top 10 tips for surviving a foreclosure to find out how.

  1. Communicate with the lender as soon as possible: Not communicating with your lender is one of the worst things you can do. By talking to your lender early in the process, you can find out exactly what will happen if you don't pay and plan accordingly. Likewise, you may be able to find a solution other than foreclosure and avoid the foreclosure process entirely if you explore open communication
  2. Understand your rights under the Fair Debt Collection Practices Act. Your lender is allowed to try to get you to pay, but he has to do so within the bounds of the law. This means collectors can't harass you, call you early in the morning or late at night, call employers or friends and tell them about your debt, or otherwise practice unfair tactics in trying to collect past due mortgage payments. Understand the rights you have and if you believe the mortgage debt collectors are violating them, get help.
  3. Delay foreclosure for as long as you can: There are a number of ways you can delay the foreclosure process. You can ask to see the original mortgage note, for example, as proof of the debt. The bank will have to produce that to continue collection activities and it can take some time for them to find it, especially if your mortgage has changed hands. You can also wait the maximum legally permitted amount of time before replying to court documents and otherwise contest the foreclosure proceedings at various steps in the process to delay the foreclosure.
  4. Stay in the house for the duration: Foreclosures can take between three and six months, or sometimes longer if you use delay tactics. During that time, you can remain in your home. In fact, you can likely remain in your house until after the bank forecloses and perhaps even after they sell the house to a new owner. At that point, the new owner or the bank will need to evict you.
  5. Save as much money as possible: During the time you are living in the house after foreclosure has begun, you will need to start saving your money. Put away everything you were once sending towards paying your mortgage, and save as much other money as you can. You will likely need that money to find a new place to live, since it can be difficult to qualify to rent or buy after a foreclosure.
  6. Secure alternative living arrangements: Once you know you are going to be foreclosed on, you should start looking for a place to live when it happens. Find out from landlords what kind of deposit you will need to put down and how quickly you can move in, or find friends or a relative you can stay with or some other housing arrangement. You do not want to have no place to go once the day comes when you have to leave your home.
  7. Get help: Attorneys, credit counselors and other specialists may be able to help you avoid foreclosure through negotiating with your lender or helping you declare bankruptcy, if that is what you want to do.
  8. Explore alternatives: Even if you don't want to keep your house, there may be more advantageous options than a foreclosure. Your lender, for example, may be willing to agree to a short sale in which you find a buyer with an offer, and the bank accepts to take the proceeds from the buyer as full payment on your debt even if it is less than the full amount owed. This is often better for the lender as well, who really doesn't want to foreclose on you, and a short sale is less detrimental to your credit than a foreclosure.
  9. Understand the implications: Foreclosure has different implications in different states. In almost every situation, it will appear on your credit report for ten years and can make it difficult to qualify for credit during that time. In some states, however, other implications may exist as well. For example, if your state allows a deficiency judgment, the bank can come after you legally for any money that remains unpaid after they seize and sell your home.

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