Possibly the most recommended way to avoid a foreclosure is for the homeowners to work out an arrangement with their lender to get their payments back on track. Almost every news story, article, and foreclosure blog tell foreclosure victims to call their bank as soon as they miss a payment and try to put together a forbearance agreement, loan modification, or other repayment plan. But homeowners who rely on only this option to save their homes must often wait weeks or months for the bank to review their application, finding out at the last minute that they have been turned down and are now facing the sale of their homes at the foreclosure auction. While attempting a workout program should be the first step for homeowners trying to stop foreclosure, not having a more comprehensive plan will ensure that more foreclosure victims lose their homes than is necessary.

Plenty of homeowners have gone through the lengthy situation of locating, assembling, and submitting all of their personal financial data and having the bank take 1-3 months to "consider" a workout program. In the meantime, the foreclosure victims continue missing mortgage payments, the lender continues accelerating interest, late fees, and court costs, and the foreclosure process continues, as well. This obviously makes for a stressful time, as homeowners are left with seemingly little to do other than wait for the lender's approval or rejection. Lenders, on the other hand, quite often turn down the homeowners at the last minute, just days or weeks before the scheduled sheriff sale. Because the homeowners may be so far behind, or have not completely recovered from their financial hardship, the lender's repayment plan may be too expensive and they do not trust that the foreclosure victims will be able to complete the plan and get their mortgage back on track.

This is not to say that this happens in every situation and homeowners are always left hanging at the end of the foreclosure process, but they should also be looking for alternative plans in case they are not accepted for a workout arrangement. There are a number of questions every family should ask itself when facing foreclosure and looking for solutions. What will you do if they turn you down for the repayment program at the last minute? What will you do if the workout plan is so expensive that you know you will only be able to make one or two payments on it before missing another payment and possibly facing foreclosure again ? What will you do if there is another financial setback during the time of the repayment plan and you have not established a savings plan?

These are not pleasant questions, of course, but homeowners simply have to plan for these situations, especially the possibility of the bank turning them down at the last minute and what their plans will be to have the sheriff sale stopped. Foreclosure victims, in all circumstances, need to put together some backup plans to stop foreclosure, like refinancing, private lenders, hard money loans, bankruptcy to stop foreclosure, and selling the home. Even hiring a third party loss mitigation company may be beneficial at this point, so a neutral company can negotiate with the lender for a more fair workout agreement. If homeowners just rely on one option to save their homes, though, there is a good chance they will end up very disappointed in the end, or searching frantically for some way to postpone the sheriff sale at the last minute.

In the end, homeowners should follow the simply rule of not trusting their lenders. In fact, they should not trust anyone but themselves to solve the problem of foreclosure. But they should not put blind faith in a lender to work out a repayment plan for them without knowing what the qualification criteria will be, and having a firm date for when the application should be approved or not. Far too often, foreclosure victims are not sure if their files are sitting on a low-level employee's desk right now with a big REJECTED stamp on it, and they may not hear about this decision for weeks or months. This is why homeowners need to make plans for what they will do even if the bank says no to a workout agreement. Having numerous backup plans to avoid foreclosure will give every family a much better chance of keeping their homes.

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