Foreclosure services available to homeowners are more commonly referred to as "foreclosure mitigation services." Whether you're unable to continue your payments but haven't yet defaulted, you've received a notice of default, or you've received a notice of foreclosure sale, a loss mitigation service may be able to help you save your home.
Options Available through Foreclosure Services
After you contact a reputable foreclosure mitigation service, they'll carefully review your finances and your loan and then recommend a course of action that's right for you. Specialists at these services are familiar with a variety of mortgage documents and laws governing foreclosure in each state. They're also comfortable negotiating with lenders and know which offers are most likely to be accepted to stop foreclosure.
Most services can help you with the following options:
- Forbearance
- Loan Modification
- Refinancing
- Bankruptcy
- Short Sale
- Deed-in-Lieu.
Depending on your specific situation, some or all of these options may be available to you. A reputable service will explain what you can realistically expect based on your situation. In many cases, they can work with the lender to avoid a deficiency judgment should a short sale or deed-in-lieu be the best option.
How to Avoid Foreclosure Service Scams
Your notice of default is a public record. As soon as it's filed, you'll start to receive postcards, phone calls, and possibly home sales visits from services offering to save your home. Unfortunately, many of these offers come from scammers who only want to profit off your loss.
- Contact the Better Business Bureau or the Department of Housing and Urban Development to see if complaints have been filed against the company
- Don't sign a contract under pressure
- Don't reveal personal information until you've thoroughly investigated the company and signed a contract
- Don't sign over your deed
- Don't sell your home at a large discount without first discussing it with your lender or a reputable real estate attorney not referred by the service
- Don't pay a consultation fee up-front.
If you're considering an offer from a service, take these precautions to avoid being scammed:
Scammers use your fear of losing your home to trick you into making the wrong decisions. If something feels off or you don't trust them, find a different service.
Reputable foreclosure services can help you save your home from foreclosure or work out a resolution that will be less damaging to your financial future than a foreclosure. If you're on the verge of foreclosure, contacting them now will improve your situation later.