Buying a home can be a dream come true for many people. Even if you worked hard and saved a substantial amount for a down payment, you will likely still need to take out a loan, which is known as a mortgage. If you fail to make your monthly mortgage payments, you could be at risk of losing your house. Foreclosure is the legal process by which the lender or bank can repossess your house. This means you will have to vacate the premises within a certain amount of time.
If your house is worth less than the amount you owe on your loan, a deficiency judgment may be entered. Not only do you lose your home, but you may owe your lender additional money to make up the difference in value, and your credit score will go down. The global coronavirus pandemic has impacted many homeowners financially. Fortunately, there are ways you can avoid going through foreclosure.
Practical Steps to Keep Your House
There is no doubt that the COVID-19 pandemic has impacted our nation’s economy. Many businesses have closed their doors, leaving workers unemployed and without their usual incomes. This has led many homeowners to fall behind on their bills, including their mortgage payments, which are often their biggest expense. While most lenders have instituted a moratorium on foreclosure proceedings during the current health crisis, the moratorium will eventually be lifted. It is a good idea to start preparing now for that reality.
Here are a few important tips for avoiding having to go through a foreclosure on your Illinois home:
- Prioritize your spending: It may seem simple, but creating a budget to ensure you have enough money at the beginning of each month to make your mortgage payment can go a long way in long-term financial success. In addition, getting a second or new job can provide additional funds to put toward your mortgage payments if you are struggling to come up with the amount on our regular pay.
- Do not ignore the payment due dates: Pretending a problem does not exist will not make it go away. The longer you wait to make a payment, the further behind you will become and the harder it will be to climb out of that financial hole.
- Contact your lender: Mortgage companies, banks, and lending institutions offer payment options, so it is important to let them know as soon as possible if you are late or miss a payment.
- Cash in your assets: Although this may be difficult, selling some of your valuables can allow you to make up your missed payments so your home does not go into foreclosure. For example, if you have jewelry that you are not wearing or a life insurance policy, cashing those in can assist in reinstating your loan.
- Understand your rights: Read through your loan documents so you know what will happen if you miss a certain number of payments. Foreclosure laws vary from state to state.
- Learn about foreclosure relief options: The Federal Housing Authority (FHA) offers helpful information about preventing a foreclosure, also called loss mitigation. In response to the coronavirus crisis, federal and state relief has come in the form of temporary moratoriums on evictions and foreclosures. Modifying your current loan to make it more manageable may also be a viable option.
- Be wary of foreclosure recovery scams: Some companies advertise immediate foreclosure relief, but they may just want your signature so they can take over the deed to your house.
- Hire an experienced attorney: Professional advice from an experienced foreclosure defense attorney can help you explore your legal options so you do not lose your home. Contacting a reputable real estate broker or a HUD housing counselor can also offer practical advice.
Contact a McHenry County Foreclosure Defense Lawyer
During these unprecedented times, many people are spending more time at home in an effort to stop the spread of COVID-19. However, some individuals are at risk of losing their homes if they fail to pay their mortgages in a timely manner. At Newland & Newland, LLP, we will work hard to make sure you do not have to leave your home due to foreclosure. Our skilled and dedicated Waukegan loan modification attorneys are prepared to assist you with determining what you qualify for in terms of available legal remedies. To schedule a free consultation, call us today at 847-549-0000.