Tips On Avoiding Foreclosure

ROCKVILLE, Md. –– Interest rates are at all-time lows, home sales are breaking records and the dream of home ownership is becoming a reality for more and more Americans. But for some, that dream has turned into a nightmare.

“As interest rates drop and the housing market continues to soar, people are taking out bigger and bigger mortgages,” said Mike Kidwell, vice president and co-founder of Myvesta, a financial health center. “Many people are stretching their finances to the limit by purchasing more house than they can truly afford. With so much of their income going toward mortgage payments, there’s no safety net when a problem comes up.

“If you are having trouble paying your mortgage or if you think you are going to have trouble in the near future, the worst thing you can do is cut off all contact with your lender,” Mr Kidwell said. “Too many people panic and avoid telling the lender about their situation, then try to bargain at the last minute when their house is already foreclosed upon. By that time it’s usually too late.”

He offers these tips for homeowners who are having trouble making mortgage payments:

Contact the lender immediately. Many lenders have programs available to help homeowners keep their homes. Contact a mortgage broker about refinancing the loan, lowering the payment with a new mortgage.

Homeowners who have private mortgage insurance (PMI) should contact the insurance holder; it may lend the money to become current. Consider borrowing money from friends or family.

To help people who are falling behind on their mortgage payments or facing foreclosure, Myvesta wrote What to Do When You Can’t Pay the Mortgage. It can be downloaded online from www.Myvesta.org.