Tips for Single Parents to Avoid Foreclosure

Avoid Foreclosure as a single parent

Home foreclosure is a problem that a lot of single parents have to worry about. It is something that suddenly seems a lot more possible when you are suddenly faced with the task of being the only adult in the family.

There are a number of things that you can do as a single parent to avoid foreclosure. The Obama administration has put programs in place to ensure that this is not something that single parents will have to deal with for much longer.

How to avoid foreclosure when you are behind on your mortgage

Step 1

The first thing that you should do to avoid foreclosure is to see if you are eligible for the Obama administration’s “Making Home Affordable” program, a new program aimed at helping single parents avoid foreclosure on their homes. To be eligible:

  • You must have recently suffered a significant hardship. ‘Significant hardship’ refers to things like divorce, job loss, or a medical crisis.
  • Your mortgage needs to be more than 1/3 of your monthly income.

The important thing to remember is that it is possible to avoid foreclosure even if you have already fallen behind on your mortgage payments. There is no reason why you need to suffer and end up on the street with your children. There are programs in place, such as this one, to help you avoid foreclosure.

Step 2

Another thing that you should do to avoid foreclosure if you have fallen behind on your mortgage payments is to contact the person or institution that you borrowed the money from and see if you can modify the parameters of your agreement in such a way that you will no longer feel the financial pressure of your situation. Your bank may be able to help you by:

  • Lowering interest rates
  • Extending the terms of the loan
  • Reducing the principal on the loan

It may seem unlikely to you that the bank you took the mortgage from will be willing to help you in such a way, but you should note that in many cases it is actually less costly for your bank to do one of the above than to go through foreclosure proceedings, so it is important that you pursue this avenue of inquiry in order to ensure that you are able to adequately avoid foreclosure on your home.

How to avoid foreclosure when you are not yet behind on your mortgage

Step 1

Even if you are not behind on your mortgage yet you may, for various reasons, anticipate being behind in the future. What makes matters worse is that you are unlikely to be able to sell your home for more than you owe the bank in the current economic climate. There are a few things that you can do to avoid foreclosure on your home in the future.

Again, there is a program in place, namely the Obama administration’s “Making Home Affordable” refinancing program through which you can consider refinancing your home. This is a great program for single parents who want to avoid foreclosure on their homes and has proven thus far to be a very effective method indeed of keeping your home.

Step 2

You could also look into “no closing costs” refinancing options. Just remember that these financing options usually stack the closing costs onto the actual loan so in the long run you will probably end up paying a lot more. However if this is the way for you to avoid foreclosure right now then that is what you should do.

General tips to avoid foreclosure for single parents

Tip 1

The first important tip that you need to keep in mind is that you must not ignore the problem. It may seem easier and more preferable just to pretend that the problem doesn’t exist but this is not the way to approach the situation. In the long run you will still lose your home, so facing the problem as early as possible is necessary.

Tip 2

Something that you may not realize is that the bank that you lent the money from does not want or need your house. Your house is just collateral. By contacting your lender you may be able to negotiate a deal, and, as mentioned previously, they may be able to help you by:

  • Lowering interest rates
  • Extending the terms of the loan
  • Reducing the principal on the loan

Tip 3

Make sure that you read all of the mail that your lender sends you. The mail will contain important information like:

  • What options you have to avoid foreclosure (this will be in the first communications from your lender)
  • What legal proceedings will be undertaken against you (in later communications)

If you don’t read your mail, it’s on your head. This will not be accepted as an excuse if you go to court and you will be worse off if you don’t know what’s going on. Do not ignore correspondence from your lender.

Tip 4

Make sure that you know your rights when it comes to mortgage issues. Information about what your lender can and can’t do will be in the paperwork you got when the loan was initially agreed on. You will also need to research the mortgage laws for your state. Remember that the laws in this regard are different from state to state so you will have to find the ones that specifically relate to you and your situation in your own state.

Tip 5

Avoid ForeclosureResearch ways to avoid foreclosure online. There is plenty information online about how to avoid foreclosure. A good place to start your search for options is here. This is a government website providing you with all of the advice you need for avoiding foreclosure under the Obama administration and this should be your first port of call when looking for ways out of your situation.

Tip 6

You definitely need to get foreclosure counseling from an accredited U.S. Department of Housing and Urban Development (HUD) counselor. The counselor will be able to help you with the following:

  • Understanding the law and your options
  • organizing your finances
  • Representing you in negotiations with your lender

To find the nearest counseling facility for this purpose near you, please take the time to visit the Department of Housing and Urban Development website. If you do then you will be far better equipped to avoid foreclosure.

Tip 7

Next you will need to prioritize your spending. After the basic necessities that you will have to provide for yourself and for your children your mortgage should be at the top of your list of things that need to be paid off. If this means losing out on things such as television, then you will just have to deal with it. There are plenty of unimportant costs that you can cut to get extra money for your mortgage. Also consider ignoring unsecured debt such as credit card debt for as long as possible.

Tip 8

You need to make it clear to your lender that you are willing to make sacrifices to keep your home. For example:

  • Try selling an asset such as a car or insurance policy for cash to offset your mortgage.
  • See if someone else in your household is able to get a second job in order to bring in more money.

This will make it clear that you are willing to do whatever is necessary in order to hang onto your home.

Tip 9

In order to avoid foreclosure you should also avoid foreclosure prevention companies. These are companies that will offer to negotiate with your lender on your behalf in order to reach an agreement. Even though many of these companies are legitimate, they charge a fee for their services that could be better spent on making mortgage repayments. The services offered by these companies can also be received from mortgage counselors or your lender free of charge, so it really is not worth the money that they will charge you for the service.

Tip 10

Last but definitely not least you need to be wary of foreclosure recovery scams. If a company requires you to sign a legal document in order to help you avoid foreclosure immediately you may find that you have in fact signed over the ownership of your home to a complete stranger and become a renter in your own house. This is something that you obviously need to avoid. Never sign legal documentation without first having a full understanding of what it means.

Now that you have read through the various tips on how to avoid foreclosure you should be in a better position to decide what you yourself can do in your current situation. There are programs in place and there are things that you can do to prevent the situation from getting too much for you. You just need to be prepared to do what is necessary to deal with your financial problems. There are a lot more options out there than you may realize and avoiding foreclosure as a single parent can be easier than you think.