You are probably feeling overwhelmed right now if you are one the thousands of people about to face foreclosure in New York these days. Your house is probably worth half what you owe, and you are so stressed and angry, you can hardly think clearly. This article provides seven steps you can take right now to prevent foreclosure in New York. Following these steps will guide you on how you can improve an unfortunate situation so you can start feeling better soon. It’s important that you put your emotions aside for a minute and think pragmatically if you are going to solve your problems. Even though it is hard, think how better you will feel once you have taken action toward fixing your situation.
There are several methods and strategies that you can use to prevent foreclosure in New York. They are not mutually exclusive. The most important thing to remember as you go through this experience is to take your time. You do not want to miss important deadlines but, at the same time, you do not want to rush into anything that will make matters worse. It took you a while to get into trouble and it will take some patience to work your way out.
Identify Why You Are in Trouble
Ask yourself, how can I avoid foreclosure? Then pause and try to figure out why you are in this position. It may be due to one sole cause or to various causes. Some of the reasons might be in your control and others are not. You need to have this information ready because you are going to be drilled about it if anyone offers help.
For instance, you or your spouse may have lost a job or seen income to your business drop significantly. If the latter happened, prepare data about when this began to occur and have your tax information ready. Your latest tax returns may be helpful in establishing the problem.
Other reasons for foreclosure may be divorce, too much debt, illnesses or even a death in the family. Keep all the pertinent data in one place and be prepared to refer to it often.
Do not jump into the arms of the first people to offer help with your situation and offer them money. There are a lot of scams out there right now that take advantage of people in your situation. Unless the program is offered through a bank that is known to you, always check any businesses credentials with the Better Business Bureau or any appropriate government agency.
Ask for Time to Make Up Payments
The easiest thing to do is to call your lender and ask for more time. Often, people get into trouble simply because they do not ask for help. Many lenders are overwhelmed with foreclosures right now and do not need any more property on their hands. They are willing to work with all varieties of borrowers and their problems in order to keep people in their homes. Take advantage of this situation and simply ask for some more time. That will often prevent lenders from filing notices of default. It can at least slow down the process.
Get Forgiveness for Some Payments
It might be hard to believe, but lenders are often almost as desperate as you might feel. Sometimes, they are even willing to forgive some missed payments. This does not mean that you make them up later or pay them at the end of the loan maturity date. They actually waive the need to pay them. The debt disappears. This is rare but it does happen sometimes because lenders are eager to help you stay in your home.
Spread Out Payments
When you contact your lender, you might want to suggest some possibilities instead of waiting for them to come up with solutions. Spreading out payments is another good way to prevent foreclosure. This spreading of the debt can reduce the extra amounts to very low levels.
For instance, if you typically pay $1,000 per month and you owe a full payment, you might be able to make the next ten payments of just $1,100 per month without any other penalty. Again, these extreme measures and generous offerings are available right now because lenders are motivated to avoid defaults. Take advantage of them while you still can.
Change Loan Terms
It may even be possible to change the terms of your loan. This is an especially important opportunity for people with adjustable rate loans. You could ask the lender to freeze the rate or simply change it outright to something more manageable. In some cases, lenders have been known to modify the note on the loan and extend the amortization period.
Add Back Payments to Loan Balance
This is just another way of saying refinance the loan. Typically, a refinancing happens when rates drop and both lenders and borrowers see an advantage in renegotiating the loan. These days, some lenders will do it in order to salvage a situation that has gone bad. They may want to see that you have enough equity in the property in order to try this.
If you want to know more about how to prevent foreclosure in New York, try talking directly with your lender. This really is the best source for help in most cases. If your lender is not cooperative, you may need to seek advice from an outside agency or a real estate professional.