The recent home foreclosure crisis has affected millions across the country who can't afford to keep their homes. Letters sent to homeowners stating that they are about to lose their homes have added stress to already-troubled families burdened by the recent financial crisis.
To add insult to injury, many of the banks and financial institutions that own or service the mortgages have been forced to suspend their foreclosure actions after it was revealed they didn't have the proper paperwork or didn't properly notify homeowners who were in trouble. In other cases, many lenders could not prove they had the legal right to begin a foreclosure procedure. Some lenders admitted that employees often signed documents without even reading them.
Despite their financial difficulties, many homeowners might have avoided foreclosure had they taken a couple of proactive steps. Experts say the first step should always be to immediately contact the lender to let the company know that trouble is brewing. Some lenders will assess your situation and determine if a plan can be formulated to keep you in the home by temporarily suspending your payments, working out a mortgage reduction or modification or using available equity. Talking to your lender on a regular basis shows that you are serious about working out your problems.
If the lender proves uncooperative, some experts suggest filing for bankruptcy, especially if you don't have equity in your home. While you can't discharge your mortgage, a bankruptcy filing will allow you to stay in your home while you clear your other debts. That step could allow you to eventually begin repaying your mortgage. Experts also suggest keeping all your records, including those of mortgage payments, deeds and banking documents.
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