There were more than 1 million foreclosures in 2010, according to RealtyTrac, a leading online real estate marketplace and publisher of the country's largest and most comprehensive foreclosure database. In fact, banks seized a total of 1.05 million properties, topping the previous record of 918,000 in 2009.
The truth is, everybody loves to talk about the stats, but rarely do we take a moment to actually think about the faces behind these enormous numbers. Foreclosure is truly a horrible event, and there are hundreds of thousands of families right now who are finding themselves stuck with escalating mortgage payments, declining home values, and no way to sell their home.
I can think of few things that place more financial stress in one's life. In March of 2008, Roland Gore killed his wife and dog and then set fire to his home in FL, which had been in foreclosure, before killing himself. More recently, a 90-year-old widow in Ohio, Addie Polk, shot herself in the chest as she was about to be evicted from her home of 38 years. Karthik Rajaram, an out-of-work portfolio manager in California fatally shot his three sons, wife, and mother-in-law before turning the gun on himself. As tragedies such as these continue to mount up across the country, we must accept the fact that we're living in troubled times that are breeding a sense of chronic despair and helplessness throughout American households.
Who should we blame for this whole mess? Of course, lenders want to place the blame on consumers that purchased more home than they could really afford. And consumers want to blame lenders for pushing risky loan packages down their throats. Don't forget about the government - it's always easy to blame them.
I argue there's simply no more time for us to sit around placing blame. If you're facing foreclosure or worried that a mortgage problem could be looming in the near future, you must act now! Find solace in the fact that there really is hope. You can help yourself, and believe it or not, there are others out there who are genuinely interested in helping you too.
So don't wait around for Congress to pass more legislation that will stop the foreclosure nightmare. Don't rely on your lender to step up to the plate first and offer a solution to the deal they worked so hard to sell you on several years ago. Don't throw your hands up in the air and give up on everything you have worked so hard to build.
The fact that you're reading this article proves you have a desire to understand what your options are and find a proactive solution to your problem. So, read the following tips, do your homework, and then pick up the phone to start making things happen. Don't let yourself become another foreclosure statistic!
1. Know your state's foreclosure law
The length of the foreclosure process varies from state to state and depends on the state's foreclosure statute. Time is of the essence, so it's vitally important that you not only understand each step in the process, but also how long it can take from start to finish. Familiarize yourself with the statute first, and then use it as a roadmap to develop your loss mitigation strategy.
2. Communicate clearly with your lender
Once you have a better understanding of the foreclosure process, it's time to clearly communicate your situation to the bank. Don't hide the facts. The better your lender understands your unique situation, the better they'll be able to help you develop a solution. Remember that no matter what your current financial situation is, you must show a willingness to pay what you owe and a desire to follow through with your obligations.
The banks will approach each situation purely as a business transaction, so if you don't at least exhibit these basic characteristics, you'll have a difficult time convincing them to provide the help you need. Your job is to bring a face/family to the negotiating table, and then give the bank a good reason to help you pay them what you owe.
3. Don't feel prepared to negotiate? Seek help from a professional
"Loss Mitigation" is a process available to help you stop a foreclosure before it actually happens. The main focus of loss mitigation is to keep you in your home through negotiating a mortgage refinance or loan modification with the bank. If that's not possible, there are several other methods that can be utilized as an alternative to foreclosure, such as a short sale or deed in lieu of foreclosure.
This is serious business, and you may not feel comfortable entering into negotiations with your lender alone. In fact, if you partner with a reputable firm, your chances of negotiating a positive outcome with your lender elevate significantly. So, do your research and compare reputable firms specializing in loss mitigation before choosing a partner that meets your specific needs.
