by Dan Krell
It is common to experience financial problems at any given time in one’s life. There are many reasons people experience financial problems. If it isn’t being surprised by loss of employment, illness, or divorce it may be due to lack of financial planning. Whatever the reason, experiencing a financial crisis, including foreclosure, is an unsettling process for anyone.
A site that is becoming more frequent in any neighborhood is the home going through the foreclosure process. The owner may still be in the home or they may have vacated months earlier leaving an empty shell to deteriorate in the ensuing months.
At first, you may not notice anything different in the home, but as time progresses it hard to not notice. You may notice your neighbor withdrawing and evading anyone coming to the door. The house numbers may disappear in an attempt to confuse those trying to identify the home. The lawn may be neglected and become overgrown with grass and weeds. The home itself may noticeably fall in disrepair as well.
Many people facing foreclosure tend to be in denial and believe that nothing is wrong and go about their lives thinking that they will not lose their home. Denial is a common defense mechanism that serves to lessen the severity of emotional pain that one may endure. However, it is not useful when facing foreclosure. Denial is a slippery slope such that people may not confront the challenges they face, and in this case-lose their home.
If you are falling behind in your mortgage, you may want to consult a bankruptcy attorney. As foreclosure is a manifestation of a larger financial problem, reorganizing your debts may help save your home.
If you find that you can no longer afford your mortgage, selling your home may be an option; however, as home prices have dropped you will have to determine if this is practical. If you can prove that your home has lost value, a common tactic is to ask the lender for a short sale, which is essentially asking them to take less than what is owed.
If you do not pay your mortgage, the mortgage company will be trying to contact you; it is important to communicate with the mortgage company so as to determine if they can assist through such measures as forbearance. You may be able to renegotiate the terms of your loan, or even have your late payments forgiven in an attempt to remedy the situation.
If you continue to not pay, you will receive a notice of default through certified mail. After receiving the notice, you may have an opportunity to reinstate your loan by paying the past due amount including late fees.
At this point, if you do not take action, the mortgage company will initiate the foreclosure process. Once the foreclosure process starts, your options are limited; the time from the initiation of the process to the foreclosure sale can be quite fast.
The foreclosure process is not pleasant, and can impact those involved with long lasting financial and psychological scars. If you know that you may be facing a foreclosure, it is important to be proactive. If you need assistance, the Maryland Attorney General offers information to those in foreclosure on the web at: www.oag.state.md.us/Consumer/foreclose.htm.
This column is not intended to provide nor should it be relied upon for legal and financial advice.This article was originally published in the Montgomery County Sentinel the week of April 2, 2007. Copyright (c) 2007 Dan Krell.