MISTAKE #1: Choosing to spend thousands of dollars to have an Attorney file Bankruptcy based on the assumption that it will make the Foreclosure go away.
Many debtors will spend everything they have on an Attorney to file Bankruptcy only to lose the house. All they have done is paid thousands of dollars in Attorneyís fees, when they could have kept their money and had the same result. Know the bottom line of what this will cost and what your new increased monthly payment will be before filing Bankruptcy. (This is not Legal Advice)
MISTAKE #2: Choosing to spend every last penny by agreeing to a forbearance (payment plan), that the Lender told you to do.
Increasing your monthly payments isnít going to solve your problem. You are here because the payments were unaffordable in the first place. A Lender will increase your monthly payment through forbearance knowing that more than 85% of the people will not make the 2nd payment. The Lender is just trying to get every last penny before they follow through with the Foreclosure proceedings. Make sure you know your budget and what you can afford before agreeing to forbearance. Also, have the Lender fax you in writing what your payments will be.
MISTAKE #3: Choosing to sign a listing agreement with a Realtor.
This mistake is what has caused many people to go into Foreclosure in the first place, because the Realtor could not sell the house at a price to satisfy his/her commissions. The debtor can no longer afford his or her payments and find themselves in Foreclosure.
1- Many times a debtor in Foreclosure will sign with a realtor to sell the house and the realtor is unable to sell the house at a price to satisfy his/her commissions. The house goes to Foreclosure!
2- There have been many times when the seller has found a buyer who was ready, willing and able to buy the house, but the house could not be sold because the Realtorís commission would have cost the seller thousands of dollars to sell the house.
3- There have been times where the Realtor does sell the house, but the Buyer does not close in time to stop the Foreclosure.
In the end if the house goes to Foreclosure, the Realtor has nothing to lose. If you already signed a listing agreement you may be able to get out of it because you are in Foreclosure and can show that you are a distressed seller. The Realtor insisting on keeping the house tied up would show extremely bad faith on their part.
MISTAKE #4: Choosing to sign a Deed in Lieu of Foreclosure with the Lender.
The Lender will ask you to do this leading you to believe that it is in your best interests. But the reality is that it is in their best interests. Donít make this mistake because your public record will clearly read DEED IN LIEU in other words a VOLUNTARY FORECLOSURE. This is just as bad as a FORECLOSURE. This is of no benefit to you and completely eliminates your credit options and your ability to take control of the situation.
MISTAKE #5: Choosing to wait until the last minute to do something about your situation.
Time is your worst enemy and the clock is ticking. People wait because they are in denial, due to distress or sometimes depression. Waiting too long will leave you with little or no options to take control of your situation. Explore your options now and make an educated decision on what is best for you.
MISTAKE #6: Choosing to count on a Mortgage Brokerís promise to get you a loan.
A Mortgage Broker has nothing to lose if the house goes to foreclosure. They are the Middle Man and are at the mercy of a lender who they report to. If you are absolutely confident in your Mortgage Broker, make him/her commit a deadline to you in writing. Also, be sure you know ahead of time if the new monthly payments will be affordable for you.
MISTAKE #7: Choosing to listen to the poor advice of an Attorney, friends, or family, telling you not to act on an option that is good for you.
For example: Many sellers decide that the best solution is to sell the house, stop foreclosure, and put the problem behind them and make a fresh start. The Attorney, friend, or family relative will advise them not to do this, without offering a solution they are willing to provide to stop the Foreclosure. Remember this is about you and no one else. Make sure that you make an educated decision that works best for you.