Foreclosure in your future? Here are 4 ways to save your home from that fate

In 2020 the number of homeowners who have fallen at least three months behind on their mortgage payments has increased 250 percent

As federal and state moratoriums blanket the country, more Americans have fallen behind on their mortgage payments at levels not seen since the Great Recession. Fox News reported this news on March 2 and the Consumer Financial Protection Bureau offered details in this article earlier this month.

The Consumer Financial Protection Bureau calculated that in 2020 the number of homeowners who have fallen at least three months behind on their mortgage payments has increased 250 percent to over two million households and is now at a level not seen since the height of the Great Recession in 2010. 

These homes are estimated to owe almost $90 billion in deferred principal, interest, taxes, and insurance payments.  Unfortunately, these numbers may not tell the complete picture because when the moratoriums soon expire and the lawsuits flood the courts, these numbers could be much larger.

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However, if you fall into one of these groups, there are ways to save your home and avoid being foreclosed on if you act now. Here are my four top suggestions: 

1. Call Your Lender:  Lenders Are Making Record Deals

Lenders are losing money because they are unable to foreclose on homes during the moratoriums. 

Therefore, many lenders are offering special items on their menu to entice borrowers to pay their mortgage, including deferring loan payments to a later date or the end of the loan, deferring or lowering interest payments, lowering fees, and keeping you from defaulting on the loan in other creative ways.    

2. Sell Your Property and Price It Right

If you have already communicated with your lender and the payment plans and forbearance payments are just not in your budget, many of the markets in the nation are breaking records; you may make a profit by selling your home.

The key is to find a broker that is going to care about you, your property and most importantly that your property is priced to sell. 

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By pricing it to sell, the property will not stay on the market longer than you can afford. It may even create so much interest that it starts a bidding war, in which case several buyers might make offers to buy the property.

If this happens, it would likely raise the selling price.

3. Read All of Your Mail Every Day

You cannot afford to miss your court date or an invitation from your lender to make a deal on your payments. All of your mail from your lender must not only be read but must be responded to immediately. 

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Too many homes have been lost because the borrower missed their court appearance or failed to call a lender back when the lender was offering lower payments. 

4. Save Your Money

As someone who has represented lenders for 27 years, I find that the second greatest enemy against paying the mortgage besides unemployment is blowing a paycheck on other bills and expenses.

Paying your mortgage is infinitely more important than that much-needed home renovation. 

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I cannot stress enough that the moratorium does not mean that the mortgage will never be due—these payments are only delayed temporarily.

Despite the chatter, even the United States Constitution prohibits the government from interfering with private contracts and therefore the payment of mortgages. This will result in a foreclosed home if payments are not made.   

Adam Leitman Bailey is a real estate attorney and a New York Times bestselling author. Bailey is based in New York where he represents many of the largest lenders in America.