How To Keep Your Foreclosed Home From Going To Auction
If your home is in bank foreclosure, headed to auction, you know it. You’ve been warned by your lender ahead of time that they were planning to foreclose if they didn’t get your payment and you didn’t pay them, did you? So you expected the foreclosure. And they did it. The foreclosure is now a matter of public record, so now you’re getting more mail than you know what to do with all about saving your home.
The companies offer to work with you to keep your foreclosed home from going to auction. They have the resources to help you out of the situation you are in. The downside? Many of them charge a lot for their services. And some are ruthless, taking advantage of your situation (like those who offer to buy your house for a fraction of what it is worth).
Talk To Your Lender
The first thing you should do when your are in foreclosure (your home could be auctioned) is to know the facts. When was the foreclosure filed? The clock starts ticking from that day. There are several steps before home foreclosure and auction your lender can help you understand this, as can the paperwork the courts mailed you. Your debt will be higher immediately, with the added on foreclosure fee, but it will also go up periodically, whenever they need to mail you more information about your foreclosure like when the home auction is scheduled to take place. The further down this road you go, the more it will cost you. Find out from the lender how much your outstanding debt is there’s a chance it is higher than you expected.
See if you can renegotiate with your lender. They don’t want your house, they want their money. Some lenders will be amenable to working out a new deal with you, perhaps tacking on the missing payments to the end of the loan instead of expecting them immediately. Some will waive late fees for a bit, or give you more time before foreclosing. It can’t hurt to ask your lender what they can do to help you cure the default.
Decide how you will handle your situation. Do you have resources to tap into to pay off the default and cure the loan, making it current? Maybe an old trust fund or inheritance you can use, or a rich uncle you can ask for a gift or loan? Or would a smarter choice be to refinance your home? If you can, that might be a better in several ways a lower mortgage payment in the future, cash out to pay other bills, etc. Or you might want to just sell your home. Though you may not get as much for it as it is worth, the money you give up might be less than the hit you’ll take with a foreclosure and possible home auction. Choose carefully knowing that the sooner you take action, the better.