105°F
weather icon Clear

Missing payments? Here’s how to avoid foreclosure

Most people who sign a mortgage don’t intend to walk away from it. Still, unforeseen circumstances — huge medical bills, lost jobs, divorce or eroding property values — can overwhelm even the best-intentioned borrower. A simple twist of fate can leave you facing a homeowner’s worst nightmare: foreclosure.

Communicate with your lender

Lenders want your money and the interest that comes with it, not your house.

If you seem to be a good risk, the lender will offer to help keep your mortgage afloat.

But be forewarned: If you seem like a bad risk, the lender may cut its losses by taking steps to foreclose and evict you as quickly as possible.

The key is to contact the lender before your debt gets the better of you. The sooner your lender knows of your problem, the more help it can provide.

The foreclosure spiral

The foreclosure spiral begins when your loan payment becomes 16 days overdue. At that point, your mortgage servicer will try to contact you to work out a repayment schedule to bring your loan current.

If your first payment becomes 30 days delinquent and the next month’s payment looks doubtful, collection attempts begin in earnest.

If your payments fall 90 days behind, the servicer will likely initiate formal foreclosure proceedings.

Ways to avoid foreclosure

Here are some options your lender may offer if you miss a payment and want to avoid foreclosure:

• Repayment plan: If you suffer a short-term financial setback (expensive car repairs, a medical emergency), your lender may provide some breathing room by agreeing to let you pay off your missed payment in two installments over the next two months.

• Loan modification: Mortgage servicers can adjust the terms of your loan — most often by lengthening the amortization schedule, lowering the interest rate or rolling the delinquent amount into the loan and re-amortizing the new balance — to help you bring the loan current. After the financial crisis, the federal government started HAMP — the Home Affordable Modification Program.

• Short sale: A short sale happens when the lender allows you to sell the house for less than the outstanding loan amount, takes the proceeds and forgives any remaining debt.

• Short refinance: The lender forgives some of your debt and refinances the rest into a new loan.

• Refinance with a “hard money” loan: You won’t like the high rates and fees of a hard money loan — one from a private lender, often an individual — but it may buy you time to sell your home and avoid foreclosure.

Don't miss the big stories. Like us on Facebook.
THE LATEST
Several factors play into new home sales dip

New home sales in the four leading master-planned communities in Las Vegas are down during the first six months of 2019, but builders and analysts said they wouldn’t be surprised if they finish the year even or ahead of 2018.

Several factors play into new home sales dip

New home sales in the four leading master-planned communities in Las Vegas are down during the first six months of 2019, but builders and analysts said they wouldn’t be surprised if they finish the year even or ahead of 2018.

Las Vegas is moving toward modern architecture

Early this year, California-based architect sparked ire and even some agreement among Las Vegas home designers and builders when he criticized the residential architectural landscape of Southern Nevada.

Summerlin and Inspirada lead new home sales

Summerlin and Inspirada led the way in master plan net sales during the first quarter of 2019, according to data released by Home Builders Research. Net sales for the quarter overall were down 19 percent compared to a robust 2018 but similar to 2017.

New-home sales rebound in early 2019

Home Builders Research reported that the 810 closings in February were 27 percent higher than February 2018. For the first two months of the year, the 1,421 closings are 75 more or 5.6 percent higher than a year ago. In releasing his numbers, Home Builders Research President Andrew Smith said the final two months of 2018 made the short term outlook, for the market “a bit worrisome” but sales figures “have rebounded nicely” since the start of 2019.

Expert points to positive signs for new homebuilding

“With the first two months of 2019 nearly in the books, the new home segment of the housing market in Southern Nevada is performing well enough to temper some of the growing concerns many felt about the future in the fourth quarter of 2018,” said Andrew Smith, president of Home Builders Research.

Last year new home sales strongest since Great Recession

Southern Nevada homebuilders finished 2018 on an upbeat note and the year’s closings turned out to be the strongest since the Great Recession. Prices also set a record for single-family homes, creating an opening for more affordable attached housing.

Las Vegas master plan communities continue to develop

Summerlin, which was as low as 25th in the nation in 2011 with 221 sales, has steadily climbed back up the rankings since then. It reported 437 sales in 2014 when it was 15th in the nation and jumped back into the top 10 in 2015 and has stayed there since. It had 769 sales in 2016.