Tips for handling a foreclosure
WHAT TO DO
What to do when served a foreclosure notice:
1. Don’t panic. Know that you are not alone. On average, it takes well over a year to complete a foreclosure in Illinois. Even if you do lose your home, you can rebuild your credit and qualify for a new mortgage in as few as three years.
2. Create and assess an honest household budget. You need to know how much money you can really spend on a mortgage payment.
3. Take a two-pronged approach: First, work with your lender by applying for assistance such as a loan modification. Then, defend or participate in the foreclosure. Cook County offers free legal advice and a mediation program to help you.
4. Don’t be discouraged by your lender’s carelessness. You will face numerous challenges talking to your lender: being on hold for an hour, lost paperwork, etc. Never, ever take no for an answer.
5. Save as much money as you can. If you cannot save your home, you will need as much money as possible to move.
What to do once if your home is lost to foreclosure:
1. Let go. This is no reflection of your character. It is a setback you can overcome.
2. Focus on finding a suitable apartment or home to rent. If the landlord does credit checks, explain your situation.
3. Focus on rebuilding your savings and credit.
4. Avoid rent-to-own deals. Most require that you find a mortgage in 1-2 years. You won’t be ready for homeownership that soon.
5. Speak to a bankruptcy lawyer about discharging that debt. The last thing you want is to be hounded by your bank years from now.
Source: Michael W. van Zalingen, Capital Z Strategies, Inc.