How Can I Avoid Foreclosure?

Q: What options do I have besides foreclosure?

We recently bought a house and my husband lost his job with the airlines. We are not behind on the house just yet. I would like to know my choices. Can I turn over the keys to the bank? Or will the bank let me pay the interest until next spring or summer when maybe things are better? - Monica

Dear Monica,

Open communication may be the answer to your problem. Many lenders have policies in place to help people in your situation. Please call your mortgage company today.

Turning the keys over the bank is not a desirable solution. It would result in what is called “foreclosure.” This would negatively impact your credit for the next seven years and possibly prevent you from getting another loan during that time.

In addition, if the bank sold the home for less than the loan amount, you may be responsible for the difference.

My advice is to slow down a bit and analyze all of your options.

Best of Luck,
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Q: My mortgage company says I am behind on my mortgage, but I disagree. Can they make me pay?

My mortgage company says I am behind on my mortgage, but I disagree. Can they make me pay? "According to my mortgage company, I'm behind one month (I disagree!) But in order to protect our credit I'm willing to pay $200 a month for five months for a total of $1,000. Can they force me to pay that amount at once? Can they sue me even if I'm willing to make those payments? Can they foreclose on my house because of this?" - Virgilio

Dear Virgilio,

Do you have proof that you are current on your payments? Check your bank statements, mortgage statements, or cancelled checks to verify payment. With proof, you and your mortgage company can surely resolve the situation. Without proof, the mortgage company can request payment in full and does not have to accept your plan to pay the amount in installments.

That being said, many lenders are willing to work with consumers to get back on track. We recommend that you keep the lines of communication open with your lender and start searching for that proof! Remember to keep detailed records in the future.

Best of luck,
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Q: Which option is best after receiving a notice of foreclosure?

I recently received notice of a foreclosure through my mortgage company and was seeking some advice on procedures which might be able to help me stop or put a forbearance for a few months on my payments and possibly put them towards the back of my loan. I recently was approached by a door-to-door real estate broker claiming he would be able to negotiate with the bank for a fee of $1,400. Which option is best after receiving a notice of foreclosure: letting the real estate broker negotiate with the bank for a fee, filing Chapter 13, or filing the forms myself for a special mortgage forbearance agreement? - Steven


The first thing you need to do is call your mortgage company yourself. Open communication is very important. Be wary of anyone coming to your door offering unsolicited services. Make sure you understand exactly what you are buying — $1,400 is a lot of money.

Many mortgage companies have programs already in place that will accomplish the same thing this door-to-door broker is selling.

You could also speak with a HUD-certified housing counselor at 800.432.7310 for free, professional advice.

Good Luck,
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Jessica Horton is a former copywriter and community manager at MMI.