Four Things You Should Never Do
If you fall behind on your mortgage

Number One

Never deed your property to a third party without absolute confirmation your loan has been paid off. This can activate a "Due On Sale Clause" and require you to pay the full amount still due on the loan.

Note: if you believe this option is best for you, please consult with YOUR attorney before completing the transaction.

If you deed your property to a third party, they then control the property and can do as they please with it. They can rent the property (and keep the rent), attempt to sell the property to make a profit, move into the property or use the property in other ways.

Since you are still liable for the mortgage on the property, the new owner might not make the payments, and that could become a big problem for you. Just because you no longer own the property does not mean you are no longer responsible for the mortgage loan obligations. The lender made the loan to you. And until it is paid off you will be primarily responsible for the mortgage obligation. If you give up control of the property and the new owner does not pay on the loan, the damage to your credit could be catastrophic.

A Land Trust is a better and safer way to due this. For more information click here.

Number Two

Do Not sell your home at a huge discount.

Unless the actual foreclosure sale is less than 45 days away, you have time to explore options. Take a day or two and make a few phone calls. As a general rule, if someone is pushing you hard to get you to sell your property to them, it’s probably because the deal they are proposing is very favorable – to them.

If you have equity in your home, it belongs to you. For a FREE Market Snapshot of your home, click here.
Note: No one will call you on the phone unless you specifically request it.

Number Three

Do Not authorize a prospective buyer to deal directly with your lender.

The buyer is looking out for their best interest not yours. If you are approached by a Buyer, seek a Real Estate Representative immediately to secure your interest. The buyer is looking for "The Deal" and will ask your lender to accept a discounted payoff.

The negotiations could go on over an extended period of time, and if the transaction does not work out the buyer may elect not to buy your property. It could leave you with very little time to resolve the situation and avoid foreclosure. Further, you have no control over the information that goes to your lender or the accuracy thereof. It is entirely possible that the buyer could handle the negotiation and presentation of information in a way that makes it very difficult for you to resolve your loan situation later.

If, however, you believe that your best option is to allow the buyer to work directly with your lender, make certain you consult with a real estate professional and/or an attorney before signing a contract. If you are going to do a Short Sale get representation from a real professional. It costs you nothing – the lender pays the fees. Someone should be looking out for you.

I can help, and it is FREE. The lender does not want to take your property through foreclosure. That’s why they will negotiate to get the deal done.

Number Four

Do Not do nothing.

A surprising number of people just accept what they see as the inevitable, and let foreclosure run its course. Don’t let it happen – the damage to your credit will follow you for years.

Take a little time to explore potential options. You do not want a foreclosure on your credit record. It will hamper your ability to get a consumer loan or a car loan for at least a few years, and it will be very difficult to get another mortgage for a very long time.