March 24, 2008
What is foreclosure?
If you own your home, you probably borrowed money to buy it. In return for the money you borrowed, you gave an investor a "mortgage" on your home as security. If you fall behind in your house payments, and you cannot negotiate an affordable deal (or "workout") with the investor, the investor may "foreclose" the mortgage. This allows the investor to take your property and use it to pay off your loan.
If I fall behind on my payments, will I automatically lose my house?
No. But DON’T ignore the problem. Contact your lender as soon as you realize that you have a problem. Some investors are willing to agree to a payment schedule to let you catch up and continue the mortgage. Try to make a repayment arrangement or workout plan as early as you can after falling behind. Be careful not to make an agreement you cannot keep.
CAUTION: Don’t fall for a foreclosure rescue scam. It is often around this time that you may get "foreclosure rescue" offers. People may call you or knock on your door and offer to save your home from foreclosure. In most cases, promises to save your home from foreclosure will put your home investment into the hands of the "rescuer," and you will end up being evicted from your home anyway, with nothing left.
For more information: Pine Tree Legal Assistance