What can the average person do to stop a foreclosure? If you find yourself behind on your home loan payment, first, don’t wait until you are several mortgage payments behind to get help. Mortgage companies have entire departments, known as “loss mitigation,” available to help you out of this mess. You have to specifically ask for that department — simply speaking to a customer service representative is not going to get you very far. There are many ways to negotiate with your mortgage company: you can ask them for a lower interest rate, more time to catch up on payments, lower payments, etc. Be very wary of companies that offer to do this for you for a fee, or “buy your house for cash” —some of them are scams, others are not in your best interest.

If you just want to get out of the mess before you lose the house, one way to do so is through a “short sale.” It is amazing to me that so many sellers (and real-estate agents) have never heard of this method before. The premise is simple: the bank allows you to sell you home at a loss (for less than what you owe) and they either 1) provide you with a no-interet or low interest note on the difference between the sale price and what you owe, or 2) 1099 you for the difference. In other words, they will report the difference to the IRS as income you made, and you will pay taxes on that difference. The benefit to the home-seller is that he or she may actually able to sell their home in today’s market and avoid the stain of foreclosure on their credit report for many years to come. Best of all, this method STOPS the foreclousure process in many cases. The catch? You have to show “proof of hardship” to the bank/mortgage holder. In most cases, this is also easy to do. Illness, loss of job, divorce, etc are all qualifying factors. Simply stating that you can no longer afford to make your mortgage payments and will lose your home may be enough. It varies by lender, but it costs you nothing to try.

Cynthia has handled many ‘short sale’ transactions and have helped numerous homeowners avoid foreclosure. She can walk you through the process and answer any questions you may have, as well as communicate directly with your lender of your behalf and handle the entire process from start to finish. You can reach her at (970) 468-0404 or send an email to cynthia@cynthiagoda.com.

She can also direct you to honest, quality lenders that may be able to help you

refinance into a fixed rate if selling is

not an option at the time.