A borrower’s worst nightmare has come true: the bank has threatened to take away his or her home. Now what?!
The very last thing the borrower needed at this point in time was for the bank to start harassing him or her, demanding immediate mortgage payment and threatening him or her with foreclosure. As if the borrower did not have enough to deal with already! The borrower is late with their car payments and repossession could happen any day now, not to mention the never-ending calls from collection agencies demanding money that he or she doesn’t have. What can a borrower do?
I want borrowers to realize that they are not alone; in fact foreclosures are a major challenge for thousands of families across the U.S. and Canada. I know that having this piece of important information does not help them solve their problem, but it does help them understand that others are experiencing similar financial struggles.
First of all, borrowers must keep cool, stay calm and avoid panicking—especially in front of their family. They need to maintain a level head in order to survive this ordeal. I know that their current emotional state is unbalanced at this moment and the constant calls and letters from the collection agencies are not helping to improve their state of mind. They must take charge of the situation! They should not allow their spouse and/or children to see them afraid or in a panic mode; instead, they should 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 OK.”
Secondly, they should realize that they can’t afford to sit and do nothing. The bank can and will take away their home if they do not take some sort of action. Apart from harassing them to tears until they make up their late payments, foreclosure is the only legal tool that the bank has at its disposal to recover its losses.
The worst thing that borrowers can possibly do is to ignore their problem. We sometimes mistakenly believe that ’To do nothing’ is to postpone a decision, when in actuality To do nothing’ is to make a choice by default. Borrowers literally cannot afford to make the same mistake that thousands of people have already made. The consequence of doing nothing affects not only their finances but also their physical, emotional, and spiritual well-being. The truth is that their situation will not improve and go away on its own. The bank can and will repossess their home if they 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 borrowers’ 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 borrowers: the bank, the collection agencies, and now, the real estate investors.
There are a few things that borrowers can do to improve their situation:
- First, they should take an inventory and figure out exactly where they are in the foreclosure process.
- Once they have received the “Petition to Foreclose” letter from the court, they should 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 they fail to respond, they will forfeit their rights as a homeowner and they will be unable to defend themselves in a court of law. The foreclosure process will continue without them. Therefore, they will lose your right to defend their interest in their home.
- They should seek legal advice. They may feel that they can’t afford it, but the reality is that they cannot afford not to get legal advice. It is extremely important that they do so as soon as they possibly can. Since the real estate laws vary in every state and/or province, and they need to know how to protect themselves within the court system, they must gain knowledge of their rights and obligations specified under the law as a homeowner.
- They should share their 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 and pretend that everything is fine until it is too late. When a foreclosure order has been granted to the bank, a bailiff will come to the house and remove borrowers, their family and all of their possessions from their home. They should understand that there is nothing to gain by hiding the truth. I am sure that there are people in their life who care about them, and if they open up to them about the truth of their financial situation they will be able and willing to help. Believe me, there is less shame in a borrower telling friends and family members that they are struggling financially than to having to tell them later that they have lost their home in a foreclosure.
And above all, borrowers should remember that everything is going to be OK.
