5 Things You Should Never Do When You Can Longer Make Your Mortgage Payments

There are many people who make a fortune by taking advantage of those who have fallen behind on their mortgages. Many will urge you to act quickly to save your credit. Most will steer you towards and option that only works to their benefit, for instance, by suggesting that you sell or deed your property to them.

5 Things You Should Never Do When You Can Longer Make Your Mortgage Payments

But, while you weigh your options, keep in mind these 5 things that you should never do when you can no longer make your mortgage payments:

#1 Never Transfer Deed to Your Property to a Third Party Without Confirmation That Your Mortgage Loan Has Been Paid Off

Once you transfer title to your property, the owner may endeavor to rent, sell or occupy the property. Whatever profit they make from selling or renting the property will be theirs to keep. However, there will be no guarantee that this third party will make your mortgage payments or pay off your loan, and if he or she does not, this can cause a big problem for you.

Just because you no longer own the property does not mean you are no longer responsible for the loan. Your lender loaned you the money to purchase the property, not the new owner. So, you alone are responsible for paying off the loan. If the new owner does not make the mortgage, you will have lost control of the property and further damaged your credit rating. Furthermore, you will still be left responsible for paying off loan.

#2 Never Sell Your Home Too Cheap

Unless you are within 45 days of the foreclosure sale, you still have time to explore your options and find a decent price for your home. When a buyer is pressing very hard to get you to sell your home, it is most often a clue that he sees a huge bargain and that you may be selling at too much of a discount. Remember any equity you have built up in your home is yours to keep. Never sell so cheaply so as to give away your equity.

#3 Never Give Potential Buyers the Authority to Deal With Your Lender Directly.

Firstly, you and the potential buyer have conflicting interest––while you are seeking the highest price for your home, the buyer is seeking to buy at the lowest price possible. The buyer can spend a lot of time trying to get your lender to accept a discounted payoff and in the end, he or she may decide not to buy at all. You will then be left with very little time to resolve the situation with your lender and avoid foreclosure.

Secondly, you will have no control over the accuracy of the information the potential buyer shares with your lender. He or she may misrepresent you and make it more difficult for you to resolve the situation with your lender, if you still need to do so later. If you are going to allow a potential buyer to negotiate directly with your lender, speak to an attorney before doing so.

#4 Never Do Nothing

You may feel helpless in the face of your mounting mortgage bills, penalties and fees. Many people simply give up and do nothing to avoid the impending foreclosure. However, this may only make things worse––the damage to your credit will be significant and take you many years to repair. Therefore you should take the time to explore your options.

You should avoidhaving a foreclosure on your record at all cost. Having a foreclosure on your record, may prevent you from getting other consumer loans in the future (such as an auto loan) and make it very difficult for you to obtain another mortgage loan.

Furthermore, you may still be left holding the bag for any deficiency that exists between the amount you owed and the amount the lender received when it sold your home at auction, which could amount to thousands of dollars. So, the least you can do is work with your lender to get them to release from any obligation for any deficiency that may result from their sale of your home.

#5 Never Pay Any Fees Upfront

Never pay upfront fees to any agent or company who will be negotiating a short sale on your behalf. All of your real estate fees should be paid by your lender after the deal closes. Stay away from any company asking for fees upfront. It is not unheard of for companies who have been paid upfront to disappear without providing you with the services you have paid for. No reputable company will ask to be paid upfront for work they have not performed. If they feel confident in their ability to close a deal for you, they won’t have to ask to be paid in advance.

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