by Anita Raushel, Broker, Iron Country Realty
As a realtor serving the Chisholm/Hibbing area since 1995, I am often contacted by homeowners seeking expert advice and assistance after their homes go into foreclosure. Many times, I am asked by distressed homeowners if I can contact the mortgage companies on their behalf to obtain needed information and/or try to negotiate with the mortgage company on their behalf.
Sadly, once a home goes into foreclosure, it is too late for me — or any realtor — to stop the foreclosure process or save your home. That’s why it’s important to educate yourself about the foreclosure process and what you can do to save your home as soon as you miss (or think you are going to miss) your first mortgage payment.
Having lived in the Chisholm/Hibbing MN area for 26 years, it is heartbreaking to me to see families, neighbors and our community at large being affected by the foreclosure crisis. One thing many homeowners don’t realize is that when their home goes into foreclosure, it is not only devastating for them personally, but there is a detrimental impact on our entire community as well. The ripple effects of foreclosure in our community include:
- When a foreclosure happens, homes that housed families for generations are suddenly left empty. These vacant homes are often unmaintained, becoming an eyesore and a blight on the neighborhood.
- Vacant homes can pose a health risk and safety issue.
- Local businesses see their customer base shrink, so business revenues drop and jobs are lost.
- Our local government experiences a dramatic increase for fire, police and code enforcements at the same time that local tax revenues are shrinking. School budgets and key municipal services such as libraries and recreational programs are cut.
- Homeowners still living in the neighborhood who wish to move may find that their homes are difficult to sell as the property values drop.
So, if you think foreclosures don’t affect the people around you, think again. They do.
What should you do if you are unable to keep up with your mortgage payments and are facing foreclosure?
- First of all, if you are facing foreclosure you need to be aware of timelines that must be met once the process of foreclosure begins. The sooner you talk to your lender or seek help the better.
- Beware of companies that prey on distressed and desperate homeowners by claiming that they can help you save your home. If a company requires payment up front to save your home, chances are you will never see the results you hoped for or your money again.
- Your best options are to either (1) contact your bank to negotiate a payment plan, or (2) work with a nonprofit housing counselor who can negotiate with your mortgage company on your behalf. Your mortgage lender may also be willing to modify your loan to help you catch up on your mortgage payments.
- If your mortgage company will not negotiate or modify your loan, you need to find out how long you will be allowed to live in your home before the bank takes it over and requires you to move out. This helps with planning and gives you an opportunity to make other living arrangements.
- If you ignore phone calls and letters from your mortgage company, you may come home one day and find a padlock on your door and be unable to access or remove your personal belongings.
Whatever your situation, there are options available for you to make an informed choice. The best time to seek help from your local realtor is before your home goes into foreclosure, because your realtor is powerless to help you once the foreclosure process is underway.