Updated: Mar 14
Welcome back to my Blog and today we are going to be talking about how to avoid foreclosure in Metro Phoenix and beyond. Let’s say that you are struggling to meet the mortgage payments due to some unforeseen circumstance that usually happens to good people at the absolute wrong time in their lives. What does one do if you are about to fall behind on that mortgage payment? Glad you asked because I am about to present several options so let’s get started.
What are some options that can help you right about now so I’ve shared a few action items that you should consider if you truly want to avoid foreclosure in Phoenix Arizona so see below for more details.
You have loan documents that you need to gather and organize in some type of file or cabinet before you miss your first mortgage payment if possible. Please make sure to clearly identify the records and separate them accordingly so that you can easily access them without wasting time which should be considered incredibly valuable at this point in time.
Include your loan documents such as copies of the deed of trust and the promissory note and make sure to include the following:
All billing statements (monthly.)
All records of the payments that you have made (absolutely crucial.)
Your property tax information along with your insurance information.
Also, any type of correspondence that you have received from your servicer and all copies of what you have sent the servicer as well.
Understanding your legal rights is a must so once you have gathered your documentation, you will need to go through them to understand what important information the actual mortgage and promissory note contain which should include the following: If you can reinstate your loan by catching up on all past due mortgage payments which I have written about as well in a previous article and you can up to a certain point in Arizona. Now come the fees and what kinds of fees such as the monthly late charges to include what the servicer will charge you when you fall behind on payments. Now you need to organize your financial information and some steps to follow are below:
Make sure to collect all of your pay stubs or if you are self-employed you will need to show your profit and loss statement.
Bank statements along with your federal tax return will be needed as well.
Other supporting documents that will be needed that show income are Social Security, any rental income to include alimony if you fall into this category. Why you ask? Great question as this information is used by your servicer to determine if you just might be eligible for some type of alternative versus going into foreclosure. Please remember that the lender just wants their money and not your house but they will take it if they have no choice which is not what you want.
Now it is time to review your budget which means your income minus your monthly expenses so you can reduce things you do not need which will save you money until your financial picture improves. Entertainment such as cable television, going out to restaurants and the movies would be one expense that is completely eliminated when folks have this type of financial duress. Also, talk to your credit card company and try to negotiate a reduced monthly payment which should help you tremendously. I think you get the picture now as only you know what is a need versus an unneeded expense that can be completely eliminated so do your very best to eliminate those unneeded expenses. After you have done all this, now you are ready to talk about loss mitigation options that borrowers all have access to and below are some of the more common options that will help you. A loan modification is a possibility and will make a permanent change to your current loan terms by potentially extending the amount of time you have to reduce the interest rate and pay off your loan. Furthermore, your servicer can also add any past due amounts to the balance of your loan which will help you so look into the loan modification programs that are available to you. There are also forbearance agreements and potential repayment plans that I will explain in future articles and I don’t want to overwhelm anyone with too much too fast as it is better to do your action items first before you can move forward. Last but not least is the ability to call your servicer as an invaluable option and whatever you do, please do not wait till it is too late to do so as dealing with the issue now versus later is the most important action item you can do for yourself and your family. We really appreciate you for reading our blog and if you definitely find yourself in this situation, please contact me. I can help you navigate this difficult situation.
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