When you are faced with financial difficulties and find that you don’t have the money to make your mortgage payments, you know deep down that foreclosure is looming in your future. The lender from whom you borrowed the money to purchase the home reports to the credit agencies when you make your payments and when you miss them. The first missed payments sends up a red flag and if you do not answer the telephone or reply to letters sent reminding you that you have not made your payment, then the lender may already start the foreclosure process.
The first thing to do when you are facing foreclosure is to admit that you are in debt and need help in getting out, or at least help in making things easier to handle. By trying to ignore the mortgage lender you are only making the situation much worse. As soon as you realize that you will not have the money you need this month, it is important that you contact the lender to schedule a meeting where you can discuss the issues. There is no need to feel ashamed of this because with the economic downturn that has thrown the whole world into turmoil there are thousands and even hundreds of thousands of homeowners in the same situation.
If you have a good credit rating up to this point, the loans officer will try to help you find a way out of the financial difficulties you find yourself in. The lender has a stake in the home as well as you because if it is foreclosed upon, chances are the lender won`t receive the full amount of what you owe when it does sell. It is possible that you may be able to refinance the mortgage or take out a debt consolidation loan to combine your other debts into one lower payment, giving you some leeway in being able to pay the mortgage payment.
If you start missing payments and have no possible way to catch up, then you have no other choice than to start to prepare yourself for foreclosure. You may have to consider filing for bankruptcy. There are some forms of bankruptcy under which you can still retain ownership of your home. You can also file for bankruptcy that will restructure your finances so that you can still have money to live on and repay your debts at the same time. It is important for you to meet with a debt counsellor or seek legal advice in order to help you handle the foreclosure.