Early Steps to Prevent Foreclosure

You should always have a plan B.  Here are some first steps to creating a backup plan:

• Save Money: Put some money away each month to build an emergency fund in case something unexpected happens, such as losing your job.  You should have several months of housing costs saved to protect your from unexpected financial problems.
• Reduce Expense: Think about where you can save additional money, such as temporarily canceling your cable or gym membership.  Every little bit helps.

If you still have problems, even after reducing expenses and saving money, you should:

• Call your lender: This is the most important thing you can do since lenders want borrowers, not properties – they prefer that you keep the property.
• Be honest with your lender:  Different situations require different solutions.  It will matter to your lender if your financial problems are temporary.
• Know what you owe:  Have a clear idea of what your debts are.  Debt collectors can be aggressive.  If you can’t pay all your debts, make sure your home is protected from foreclosure by paying your mortgage.
• Talk to a housing counselor:  A non-profit housing counseling agency may be able to assist you to restructure your bills to make it easier for you to pay them.
• Contact a housing non-profit:  A housing non-profit can give you valuable advice.  The HOPE National helpline, 888-995-HOPE is dedicated to helping homeowners facing foreclosure 24 hours a day.  Spanish speaking counselors are also available.

Making the call to the lender