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Communication Can Help Stop the Threat of Mortgage Foreclosure

By Gabriel Traverso
Mortgage Credit Problems Columnist


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If you have bad credit and are facing the possibility of your lender foreclosing on your mortgage you are doubtless ready to crawl into a hole and try to forget about your problems. Indeed, many homeowners with bad credit would rather ignore reality than talk about mortgage foreclosure, but ignoring the problem doesn't get you any closer to a solution.

The Threat of Mortgage Foreclosure

If you have fallen behind on your mortgage payments and have bad credit you'll likely find that refinancing your mortgage probably isn't an option, especially if you don't have enough equity in your home. However, you are not alone. The percentage of homes currently in the foreclosure process has risen from 0.98% last year to 1.28%. However, you might find it surprising to learn that mortgage lenders are as interested in avoiding foreclosure as are you; it simply costs them too much.

Communication is Key

Understanding the terminology of mortgage foreclosure and how the process works is one way you can help yourself during this period of hardship. However, what most mortgage lenders want is communication. In a recent article Brad German, spokesperson for Freddie Mac, said, "Many people think that if they call their lender, it will accelerate the foreclosure process. That's not true. There's no reason we would want the house."

If you contact your mortgage lender and explain your situation you might find them willing to work with you. The Wall Street Journal recently reported that, "one factor likely to restrain rises in the foreclosure rate, at least in the near term, is the willingness of many loan servicers--the firms responsible for collecting payment--to lower interest rates or stretch out payment schedules for some borrowers who fall behind."

Call Your Mortgage Lender

Bad credit is one thing, you can always work to repair damaged credit, but the last thing you want is for your lender to foreclose on your home loan-- and that's the last thing they want, too!

Sources
The Wall Street Journal
The Dallas Morning News

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