When facing foreclosure, some people become complacent. Well aware that they are going to lose the house, they continue to hanging around, not willing to change their actions or circumstances. Essentially they’re just going to let it happen.
Perhaps you’ve found yourself in a similar situation. From the outside looking in, it may be difficult for others to understand what you’re going through. You may find the prospect of being displaced hard to swallow, and you’re limited options seem less than appealing.
It is sad to see people lose not only their home, but their self esteem and sense of community. The loss of the home to foreclosure is often driven by, or at least exaggerated by emotion, negatively affecting sound judgment. In this article we will explore behavior typical of complacency and what can be done to avoid it.
Denial Is A Danger
There are several factors that could lead to the unfortunate reality of having your home foreclosed on. Some are unavoidable while other may have been self-inflicted; and structural problems in the economy have negatively impacted more households than anyone could have predicted. Regardless of the cause of financial downfall, denial is definitely not the answer. In fact it will most definitely make matters worse.
As mentioned earlier, emotions can cloud rational thinking; contributing to an unfortunate pattern of disbelief. Not only do some people have difficulty accepting the possibility that they can be legally dispossessed of their property, but they also have difficulty accepting good advice on how to deal with it.
Risks of Inaction
The fundamental reason why foreclosure happens is because an individual can no longer afford to keep the house, that is make mortgage payments. If a person feels as if they are struggling to own a home, it may be time to change strategies. Not to say that you should give up at the first sign of a financial instability. You should consider your options in the face of that situation, and be fully prepared to exercise them as necessary.
Most people don’t, and end up losing their homes. There’s a whole slew of negative consequences that can go along with that.
You’re not powerless
Every foreclosure-in-the-making will eventually reach a point of no return. That’s why it’s important to exercise any options you have as early as possible.
Here are some strategies that you could consider, rather than trying to hang on until the foreclosure is final:
Be realistic. When people experience financial difficulties, it’s common to believe that they’re only temporary. A lot of people are facing financial shocks that take them not months, but years to overcome. If your house has become an unsustainable expense, you must face the reality that you may no longer be able to afford to be a homeowner.
Stay in control of your circumstances. Just because you’re going through a tough time financially, doesn’t mean that you’re without options. But time is a critical factor with almost all options. Set up short-term strategies to stay in the home, but attach time limits. If after three months or six months you’re still struggling to pay your mortgage, you should be prepared to relieve yourself of the home; making arrangements to sell the property.
Create an exit strategy. Get as much information on selling your property as you can get. That means getting a realistic assessment of what the property is likely to sell for. If you reach a point where selling the house is the only viable survival option, you’ll need to do it quickly. That means you’ll need a price it to sell. If you owe more on the house than it’s worth, talk to your lender about setting up a short sale. The more you do in advance, the easier it will be to act when the time comes.
Keep the house and property in good condition. This is easier said than done when money is tight. But you can keep the house clean, keep the lawn cut and hedges trimmed, keep excess stuff from accumulating around the house, and paint a room or two as necessary, at very little cost. This will make it much easier to sell when the time comes.
Focus on setting up your next move. By preparing an exit strategy before the sheriff comes knocking at your door, you enable yourself to make a more graceful departure. If you sell before your situation becomes desperate, you’ll have a better chance of preserving your credit, preserving your income options, and keeping your head clear so that you can maintain some form of forward motion. All of that is important – you’re not swearing off homeownership forever, you’re just abandoning the current effort, so that you’ll be in a better position to try again later.
Benefits of Avoiding Foreclosure
What you’re trying to do, overall, is to avoid the type of crash-and-burn foreclosure situation that the majority of people experience. Rather than concentrating on saving your house, focus instead on salvaging whatever you can of your financial integrity apart from the house. Here is some of what you gain by selling your house rather than letting it go into foreclosure:
- Better credit – Foreclosure is one of the worst entries to have on your credit report. If you can avoid it, even if you have some late payments, your credit will recover more quickly.
- A better shot at your next place – It will be easier to rent another place without a foreclosure on your record. Let the house go into foreclosure, and you may be at the mercy of others, including friends or family.
- You may get some equity from the house – If you sell your home, you may get some equity out of it. If it goes into foreclosure, you won’t get anything. In fact, you’re more likely to be saddled with a deficiency judgment for the unpaid balance of the mortgage.
- You’ll get out of a negative situation before it gets worse – Hanging on the edge of foreclosure is an emotionally draining place to be. That will hamper your ability to recover from your financial difficulties, or even to do your job on a day-to-day basis.
- By selling on your own terms, you may preserve your self-esteem – You may not feel the need to abandon your friends and your community if you are able to sell rather than losing your home in foreclosure.
- Selling may be easier on kids than a foreclosure – If you sell, you’ll have considerable control over the process. If you go into foreclosure, you’ll be told what to do, and when you need to do it. That can weigh heavily on children.
Foreclosure is an ugly situation, and so are the conditions that lead to it. But you don’t have to sit around like a helpless victim. You can almost certainly avoid being evicted from your home. The only way to do that is to act before the situation gets completely out of hand.
The loss of your house does not mean that your life is over. It just means you need to take a financial timeout, reorganize your finances, and then leap forward once again. That’s a lot more constructive than staying in the house waiting for a miracle.
If you’re facing foreclosure and need help, contact us! Smart Choice Real Estate Solutions specializes in foreclosure avoidance. We have the knowledge and resources to help you stop foreclosure before it becomes inevitable.
Based on the Article: https://outofyourrut.com/foreclosure-sitting-duck/