3 Ways to Preventing Foreclosure in MN
Preventing foreclosure is possible and there’s no need to panic. There are three main reminders that you have to tell yourself:
- Know what your rights are by checking online resources and getting information. Knowing your rights as a homeowner who is facing foreclosure will allow you to act within the bounds of what’s stated in the Minnesota state laws.
- You have to be ready to tackle the situation and not run away from it. Abandoning your property or ignoring the letters your lenders send will not help you in preventing foreclosure from happening.
- You have options. In Minnesota, there are different ways in preventing foreclosure.
And, that’s what we’re going to take a look at today.
1. Talk to a Counselor
This is the first step. You have to look for housing counseling agencies that are nearest to you. Ask to speak with a foreclosure counselor to know what your options are in preventing foreclosure.
There are several agencies in Minnesota. Here is a helpful resource that contains the names of these counseling agencies as well as their numbers: HUD Approved Housing Counseling Agencies. Look for agencies that handle ‘Mortgage Delinquency and Default Resolution Counseling’.
Because of the US Department of Housing and Foreign Development’s (HUD) program, consumers do not have to pay for these counseling services. There might be minimal fees involved, but the HUD website states that the agency needs to inform the client of any fees before providing the service.
2. Follow your Counselor’s Advice
Your counselor will advise you with different options for preventing foreclosure. These options will depend on what your current situation is financially, but it may involve one of the following:
- Special Forbearance – this is done in partnership with your lender. You can work out a repayment plan that fits your current financial situation. Under this, it’s also possible for you to have a temporary reduction in your payments as well as a temporary postponement of your payments.
- Loan Modification – your counselor might recommend loan modification. You’d have to talk to your lender about this, but, generally, when the borrower has experienced long-term financial hardship, lenders do approve to loan modification.
- Deed-in-Lieu – this is an option where you to sign over legal ownership of your property to your lender in preventing foreclosure. More commonly known as DIL, it may not be accepted if the borrower is financially capable of making the mortgage payments.
3. Look Out for Scams
You are already in deep water. Even though you are in dire need of preventing foreclosure from happening, you still need to have your guard up with fake agencies and scam artists. Here are a few tips to avoid getting scammed:
- It’s always to your advantage when you know your rights.
- Learn about the foreclosure process in your specific state. Some agencies might offer you services that you can just do yourself.
- Do not sign something you do not understand.
- Only follow online sources that are credible: http://www.hud.gov/.
Preventing foreclosure can be manageable, but the key is to approach the situation head on. Be honest with your lender, seek help from a credible housing agency, find out what your options are, equip yourself with information, and do not disregard alternatives like selling your house to an investor.
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