Filed under: Housing, Mortgage, Lynnette Khalfani-Cox
As politicians, federal regulators and others continue looking into whether banks took shortcuts in evicting people from their homes, millions of cash-strapped homeowners are wondering what they should do now. Most of the federal probes into the housing mess won't be completed for at least a month or so. In the meantime, if you're facing foreclosure, here are four things you should do - no matter what the outcome of various federal investigations.
1. Document everythingKeep meticulous records about your circumstances: payments made, late fees charged, agreements reached with your lender, transcripts of phone calls, etc. This will be especially important if there is any discrepancy or issue in dispute about your foreclosure notice. You may be able to challenge the foreclosure in court.
2. Answer any summons you receive
If you live in any of the 23 states where judicial foreclosure (foreclosure by lawsuit) is the norm, make sure you show up to court if you receive a summons and you want to contest a foreclosure action. The summons is what commands you to answer the lender's complaint/lawsuit in court. If you don't show up, the judge will likely sign a judgment of foreclosure and sale. At least if you show up, you have a shot at saving your home. A court will judge the merits of your defense and it may side with you, if you can prove some valid claim about why you should not be evicted.
3. Keep the foreclosure isolated
Even if you are not successful in preventing the foreclosure, work to isolate it as much as possible. For example, if you can manage to still pay your other bills, like your credit card payments or your car note, do so. This will limit the damage to your overall credit rating.
4. Maintain a proper outlook
Even though it's horrible to go through a personal and financial crisis such as foreclosure, remember that it's not the end of the world. Millions of people are struggling with massive housing debts they can't pay and some are needlessly enduring stress over homes that they know, deep down, they can no longer afford. Sometimes it's because of divorce or downsizing; other times, health issues or medical bills may have wiped out a family's resources. Whatever the case, realize that you can bounce back from foreclosure -- emotionally and financially.
Related:
+The Money Coach Book Giveaway: Win Free Copy of 'Perfect Credit,' Financial Tele-Coaching & More!
+Weight Gain Has No Effect on Earnings For a Black Man -- But Will He Get Rich?
Should you lose your home, try not to think of yourself as a failure. That's simply not the case. Just take time to assess what went wrong, regroup, and ready yourself for the next phase of life. There's no shame in renting. Alternatively, if you want to own again, take heart in knowing that you can qualify for home loans in a few short years, even after going through foreclosure, a deed-in-lieu of foreclosure, or a short sale.
Lynnette Khalfani-Cox, an award-winning financial news journalist and former Wall Street Journal reporter for CNBC, has been featured in the Washington Post, USA Today, and the New York Times, as well as magazines ranging from Essence and Redbook to Black Enterprise and Smart Money. Check out her New York Times best seller 'Zero Debt: The Ultimate Guide to Financial Freedom.'