By Attorney Richard S. Ravosa
Falling behind on your mortgage can be scary, frustrating and stressful. Now is the time to take steps in the right direction which will allow you to continue to live in your home and restore your peace of mind. The following ten tips may not apply to everyone equally, and depending on what your individual situation is, chances are you can immediately benefit from several of these time tested tips to save your home from foreclosure.
1. Always open your mail and sign for certified mail. Ignoring letters and notices from your bank or their lawyers is a big mistake. You need to know what is going on in order to get the assistance you need in time to take action. Knowledge is power and the more you know the better off you will be.
2. Contact your lender immediately. If you even think you are going to fall behind on your mortgage payment, call your lender and let them know, even if you are not behind yet. Often times, the earlier you call your lender to ask for help, the better off you will be.
3. Know what you owe. In order to solve the problem, it is best to know as accurately as possible, what the problem is. Call your lender and have them tell you exactly how much money is past due and how much money it will take to bring your loan back into current status. Ask them to put it in writing. Often times this is called a “reinstatement figure.”
4. Avoid going three months past due. Usually, if your loan is past due over ninety days, your lender will have hired a law firm to officially place your loan in foreclosure status. If this happens, unfortunately you will be responsible for paying that law firm. The amount you owe to bring your loan current will often be more than you think because legal fees, late fees and other fees have been added to your balance. The other problem with going past due over ninety days is that your lender may now refuse to accept any payments from you, unless you pay the full amount that is past due on your loan, or worse yet, demand that you pay the entire principal balance owing.
5. Create a budget. Make a list of what all your monthly expenses are and your monthly income from all sources. Your lender will need to know this information in order to help you and so will your attorney if you should decide to seek legal advice.
6. Apply for a loan modification. Most lenders will encourage you to apply for a loan modification which can help you avoid foreclosure and keep your home. Your lender has the ability to lower your interest rate and your monthly payment, but they are not legally required to do those things, but they can if they want to. Applying for a loan modification is like asking your lender for a favor. So be nice when asking your lender for a loan modification.
7. Stay involved in the process. Many homeowners who have applied for a loan modification are surprised to learn that their lender can keep the foreclosure process going at the same time! This may not seem fair, but the lender is going to take whatever steps are necessary to protect their rights, and so should you. Even though you have applied for a loan modification, your lender can still foreclose on your home and auction it off. You will need to stay in regular contact with your lender to make sure that they have postponed your auction to give them time to review your loan modification application.
8. Avoid foreclosure rescue scams. Do not believe anyone who guarantees or promises that they can save your home from foreclosure, especially if they are an out of state company. While these promises may sound comforting and appealing, they are nothing more than a wolf dressed in sheep’s clothing. No matter how much you would like to believe what they say is true, don’t fall for it, and do not sign anything.
9. Save as much money as you can. Cut your expenses as much as possible and look for creative ways to earn more money that you can put aside to apply to your mortgage payments. Your lender is more likely to help you if they can see that you are being financially responsible even though you have fallen behind on your mortgage.
10. Talk to a local attorney. Contact a local attorney in your area to learn what your legal rights are. Many attorneys offer a free strictly confidential consultation and can advise you of options that you may not even know are available that can help you. Attorneys who handle bankruptcy cases can be especially helpful because they know how to stop a foreclosure auction immediately to give you the breathing room you will need to get back on your feet.
Attorney Richard S. Ravosa practices law at Town & Country Legal Associates, with offices in Boston and Natick. Several of his cases have been cited in the Massachusetts Bankruptcy Reporter and he has been featured with his clients on Boston and Springfield television news broadcasts, as well as on the front page of the Sunday Republican newspaper and quoted in the MetroWest Daily News. Attorney Ravosa hosted a popular weekly call in radio show on bankruptcy, foreclosure prevention and debt relief that was broadcast throughout New England on WBNW, 1120 AM, in Boston. He also founded the Massachusetts Debt Relief Foundation, Inc., a nonprofit organization that provides pro bono bankruptcy attorneys to Massachusetts residents who have found themselves in debt through no fault of their own, and assists them in overcoming debt with dignity. He can be reached at: Mr.Ravosa@gmail.com
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