The first decision in the process is which of your creditors must be paid and which ones must wait. Just because a particular creditor yells louder or more often does not get them on the must be paid list. When you receive your paycheck purchase a money order or cashier's check made payable to the 'must pay' creditor (Hint: it's not your credit cards). Do not leave the cash in the bank because you could have it seized by another creditor if they have a judgment against you, or you might spend it.
Stop all unnecessary spending. When you sit down and take a hard look, you will be surprised where your money goes and how much you can actually save without making too many changes.
Once you have control of your budget the real work begins; you must quickly develop a stop foreclosure plan that will work for you and our lender. We have seen lenders put all the delinquent payments on the back of the loan, reduce interest rates, and suspend payments for several months. On one occasion the lender even eliminated the borrower's payments totally, he could live in the home payment free and if he sold it then the lender would get paid but only if he sold. While that type of situation doesn't happen very often it does show how important it is to take the correct actions and learn how to approach your lender. The lender wants to help, but only if you can re-package yourself successfully.
Some homeowners make the mistake of hiring an attorney which in our opinion is costly and not necessary. This action can even retard your ability to stop foreclosure because your attorney is required to talk to the lender's attorney, not the lender. It is the lender and only the lender that can set up a workout for you.
If you need assistance, find a company with extensive real-life experience helping delinquent homeowners so you can stop your own foreclosure. Many customers who have paid $1,000 or more to stop their foreclosure commented, “I could have stopped my own foreclosure and saved the money if I had only known what to do!”
If you know what to do and have done your 'homework' we have seen foreclosures stopped with one phone call. But, whatever action you choose to take, the most critical step to stopping foreclosure is to conserve cash!
While you probably have heard the expression “cash is king” it is very true when resolving a foreclosure. You must be able to show the lender that you can, in fact, afford to make your payments. There are a few simple steps that will show this to your lender and make you a sure thing for a loan modification.
It is important not to panic, don't move out of your house because you think the lender is foreclosing. The foreclosure process takes some time, for instance, Florida stop foreclosure takes about 180 days, so you have time to plan. There are serious consequences if you vacate your home, so stay put while you plan.
With the proper experienced guidance you can come out ahead in this situation. Your home is important and is of value even if you owe more than the current value. If you lose your home, you will still have to make monthly payment to rent and then you will truly have nothing to show for it! So, stay in your home and use a competent program to help you stop your own foreclosure. You CAN succeed!
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