It is always a rough day when someone receives a foreclosure letter. If you have just been informed about a foreclosure action against you, it is very important to keep your cool and not to make a big deal out of it. Remember that your foreclosure notice does not doom your fate. There are many ways you can handle a foreclosure action adeptly and gracefully.

10 THINGS YOU NEED TO KNOW WHEN FACING FORECLOSURE

Most importantly, stay calm under all circumstances. You don’t want to make the situation worse by stressing out. Planning out with a cool mind will help you come up with better ideas to solve the foreclosure situation.

You cannot run away from a legal notice. Receive all communication from your lender to avoid any complications. The more open and available you are for settling the matter, the easier the situation becomes.

Read and understand the basics about foreclosure and the relevant local laws. That way, you will know beforehand what lies ahead of you. This in turn would help you prepare for the situation. You might also discover any discrepancies or loopholes in your contract that can come in handy to avoid foreclosure. Refer to genuine government websites such as www.fha.gov/foreclosure/index.cfm.

Foreclosure recovery agencies and services should be avoided. Do not spend more in an attempt to avoid foreclosure. At this point, you should be firm about cutting down expenses and save up for mortgage payments. Adding a financial burden will only make the situation worse.

Short Sale can be opted for getting rid of the loan (as well as the house!). You can work out a deal with the lender to sell the house at a price lower than the outstanding loan amount. Make sure to check the tax implications of such a deal.

Foreclosure agreements can be worked out in case of temporary financial problems. In such agreements, the lender agrees to halt the regular mortgage payments for a certain period of time to give you a break. At the end of the period, the pending amount is either paid as a lump sum or distributed over the current installments.

You can negotiate with your lender for loan modification. Certain tough terms and conditions can be modified or eliminated from the original loan agreement to facilitate easier loan payment. This might be done either by lowering the rate of interest, increasing the repayment time period or cutting down on the principal amount.

File for a bankruptcy under Chapter 13 if you have a regular source of income that is too low to pay for your mortgage. This should be looked upon as a last resort as filing for bankruptcy has its own cons.

In case you do not have a regular source of income, check your eligibility for filing Chapter 7 bankruptcy. This measure should be adopted if there is no way to repay your debts and you wish to cease any contact with the lenders. Chapter 7 takes you under the protection of the bankruptcy court so that you cannot be harassed by any lender or a court order.

For further assistance, contact the housing counselors at U.S. Department of Housing and Urban Development (HUD). You can also hire an attorney if the situation seems too complicated to handle all by yourself.

This article is a courtesy the Save Your Home from Foreclosure Team, specialist foreclosure attorneys.You can reach them at 1-888-736-4248.

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