Your worst nightmare has come true: the bank has threatened to take away your home. Now what?
The very last thing you needed at this point in time was for the bank to start harassing you, demanding immediate mortgage payment and threatening you with foreclosure. As if you did not have enough to deal with already! You are late with your car payments and repossession could happen any day now, not to mention the never-ending calls from collection agencies demanding money that you don't have. What can you do?
I want you to realize that you are not alone; in fact foreclosures are a major challenge for thousands of families across the United States and Canada. I know that having this piece of important information does not help you solve your problem, but understand that others are experiencing similar financial struggles.
First of all, you must keep cool, stay calm and avoid panicking -- especially in front of your family. You need to maintain a level head in order to survive this ordeal. I know that your current emotional state is unbalanced at this moment and the constant calls and letters from the collection agencies are not helping to improve your state of mind. You must nonetheless take charge of the situation. Do not allow your spouse and/or children to see you afraid or in a panic mode; instead, encourage them with the assurance, "We will make it through. I'm not yet sure how, but I know that everything is going to be fine."
Secondly, realize that you can't afford to sit and do nothing. The bank can and will take away your home if you do not take some sort of action. Apart from harassing you to tears until you make up your late payments, foreclosure is the only legal tool that the bank has at its disposal to recover its losses.
The worst thing that you can possibly do is to ignore your problem. We sometimes mistakenly believe that "to do nothing" is to postpone a decision, when in actuality, doing nothing is making a choice by default. You literally cannot afford to make the same mistake that thousands of people have already made. The consequence of doing nothing affects not only your finances but also your physical, emotional, and spiritual well-being. The truth is, your situation will not improve and go away on its own. The bank can and will repossess your home if you do not take the appropriate actions.
Another obstacle in the foreclosure process is the lack of reliable information available. The majority of books and general postings on the internet are on "how to take advantage of great foreclosure deals." They want to exploit your current financial situation for their own gain. There is very little information out there that helps the struggling homeowner avoid going into foreclosure. It seems that everyone is out to get you: the bank, the collection agencies, and now, the real estate investors.
There are a few things that you can do to improve your situation:
- First, take an inventory. Figure out exactly where you are in the foreclosure process.
- Once you have received the "Petition to Foreclose" letter from the court, respond within the allotted time (in most cases it is 21 days). The foreclosure process is time sensitive and varies in every state in the USA and in every province in Canada. If you fail to respond, you will forfeit your rights as a homeowner and you will be unable to defend yourself in a court of law. The foreclosure process will continue without you. Therefore, you will lose your right to defend your interest in your home.
- Seek legal advice. You may feel that you can't afford it, but the reality is that you cannot afford not to get legal advice. It is extremely important that you do so as soon as you possibly can. Since the real estate laws vary in every state and/or province, and you need to know how to protect yourself within the court system, you must gain knowledge of your rights and obligations specified under the law as a homeowner.
- Share your financial situation with family and friends. No one likes to talk about finances or the lack of them, especially when their finances are not good. We pretend that our finances are in good standing and we hide the truth from our loved ones, feigning that everything is fine until it is too late. When a foreclosure order has been granted to the bank, a bailiff will come to your house and remove you, your family and all of your possessions from your home. Understand that there is nothing to gain by hiding the truth. I am sure that there are people in your life who care about you, and if you open up to them about the truth of your financial situation they will be able and willing to help you. Believe me, there is less shame in telling friends and family members that you are struggling financially than to have to tell them later that you have lost your home in a foreclosure.
And above all, please remember that everything is going to be OK.
Joaquin Benitez personally experienced foreclosure and is the author of the new book, The Foreclosure Phenomenon: How to Defend Your Home from an Impending Foreclosure, available at Amazon.com and BarnesandNoble.com.